Obama’s Home Affordability Plan

President Obama’s mortgage refinance stimulus plan makes an estimated 9 million homeowners eligible for a home mortgage refinance at a 4.5% fixed rate. Hundreds of dollars per month can easily be saved on mortgage payments. This will restore confidence in the market and home values will start to rise again and will stabilize the housing market.

Advantage of this “Home Affordability Plan” from Obama:

• The amount remaining on the mortgage must be  less than $729,500
• The home mortgage must have been closed on and finalized before January 1st 2009.
• The homeowner must use the house to be refinanced as a primary residence.
• Your income levels must be verified through the use of tax returns or pay stubs
• A letter of “Financial Hardship” handwritten and signed by you is needed. This can be a loss of income, job, high medical bills or other expenses leading to your financial hardship.
• The homeowner must agree to get credit counseling if monthly debts, including the mortgage, exceed 55% of the homeowner’s gross monthly income.

After Obama’s plan, the bank or mortgage lender can lower your monthly mortgage payment to 31% of your gross monthly income. Home interest rates can go as low up to 2% in order to meet guidelines given by President Obama. Now homeowners will not have to pay any fees for home loan modification as it was done by them only but now Government will pay this as part of the mortgage bailout plan. The bank or mortgage lender has the option of setting up a balloon mortgage payments end if the monthly payments were too low. Any balloon payments will have to be paid off in full should the homeowner want to sell or again refinance their property Incentive plans are in place, backed by the government, which will gradually reduce the homeowner’s principal over the course of 5 years, up to a maximum of $5,000, for making mortgage payments on time. The mortgage interest rates are adjustable after a 5 year period. The low 2% and 4.5% mortgage interest rates are temporary fixes to help homeowners get out of their financial problems.

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