Homeowners with mortgages backed by either Fannie Mae or Freddie Mac have an amazing opportunity to save money. President Obamas “Making Home Affordable” plan allows mortgage modification for people with a mortgage from Fannie or Freddie. Millions of homeowners can easily use this plan to save a lot of money. Here is how you can too:

Homeowners looking for a way to save money, get lower interest rates, or avoid foreclosure can use this plan. As long as the mortgage is backed by Freddie or Fannie, your are automatically eligible to take advantage of this $75 billion program. Getting approved is automatic, regardless of the homeowners financial situation. Here are some of the plans benefits:

-Home loan will be reduced so that the monthly payment does not exceed 31% of a homeowners income every month. While to some homeowners that may seem quite high, to a lot, it can be a savings of 20% or more on their home loan every month. In order to reach this goal, mortgage rates can be lowered to as low as 2% and the length of the home loan can be extended.

-Free credit and mortgage counseling are available from your local HUD office. This is available free of charge to help homeowners and borrowers avoid problems again in the future.

-Homeowners facing “Financial Hardship” should write a short letter explaining them, and make sure to sound convincing. Also, be prepared with a budget, and a reason that this will never happen to you again. Homeowners should include this letter, all relevant documents which support it, and turn it in with the application.

While getting a home loan modification may be a great move for some homeowners, not everyone will benefit. Make sure you know all the benefits and drawbacks of mortgage modification prior ti diving in.

-M Petrone

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