With the mortgage industry still in a crisis, the Obama administration has proposed a number of plans to help mitigate the damages. One of those plans – the Making Home Affordable Program – has aspirations of helping upwards of 7 million people with their troubled mortgages. It is designed to decrease the number of foreclosures and delinquent payments to help the economy get back on its feet.
Another program – the Home Affordable Refinance Program – is expected to help about 4 million other troubled homeowners. This particular program will help troubled mortgage payers qualify for a home loan modification to help them afford their monthly payments. Under normal circumstances, these people would not be able to modify their home loans because their home’s value dropped drastically and the loan-to-value ratio would be more than 80 percent. But with the Home Affordable Refinance program, these same homeowners may be eligible for lower interest rates or modifications that change their adjustable rate mortgage to a fixed rate mortgage. Another viable option under this program is to extend their mortgage for another 30 years to make payments lower so they can afford them.
Officials are saying that instituting this program should not be much of a hassle for two reasons. For one thing, it will not require an appraisal of the mortgage payer’s home in many cases. This reduces the expense for customers and lenders alike. Also, the Government Sponsored Enterprises lenders already have the information needed to follow through with these modifications so gathering the information should not be a problem.
But how does one qualify for this type of program? Is it just enough to be in an underwater mortgage? Or are there some other qualifications? Here is some of the latest information regarding this new program and what it can do for you.
• You must have entered into your mortgage loan on or before January 1, 2009.
• You can only refinance the first mortgage loan on your home. If you have second or third mortgages, those are disqualified from the modification offer.
• Your principle balance is not affected. Only your interest rate will change.
• You can only refinance your primary residence.
• Your income will be used as a means to determine your eligibility. This includes pay stubs, tax returns and other documentation needed to prove your income.
If you are a troubled homeowner, why not try to take advantage of one of these programs? With mortgage rates at all-time lows, you may qualify for a better interest rate and save yourself thousands of dollars over the life of your loan. It’s definitely worth a try.