Everyone is aware of the tough financial times facing average Americans. President Barack Obama is no exception and in response to these difficult times has released his “Home Affordability Plan”. This mortgage stimulus plan helps homeowners refinance or modify their mortgage into a fixed 4.5% interest rate. The rising number of foreclosures, and the growing number of unemployed homeowners has created the perfect storm for this mortgage crisis. Home values drop buy as much as 9% when a near by house is foreclosed on.This mortgage stimulus plan will help stabilize the market and allow homeowners and home buyers more confidence in their most valuable asset, their home. This refinancing stimulus plan was enacted in early March and since then millions of dollars have been saved by homeowners taking advantage. The ultimate goal of this refinance plan is to allow homeowners who were or would have been denied a mortgage refinance or modification due to bad credit, low equity, having owing more on a mortgage than the home is actually worth. With this plan, mortgage lenders and banks receive benefits from the Government for every at risk homeowner they approve for a refinance or modification. This means that actually getting approved for a refinance is easier than ever. Combine that with the current near all time low interest rates and you can easily save hundreds of dollars per month.Here are some eligibility requirements for this mortgage stimulus refinance plan from Obama.The home that is to be refinanced must be the primary residence of the homeowner. Investment and second properties are not covered under this plan.Homeowners can owe as much as 105% of the value of their property and still qualify for refinancing or modification.Homeowners who have a mortgage backed by either Freddie Mac or Fannie Mae automatically qualify for a loan modification. This new loan will make mortgage payments no higher than 38% of the homeowners gross monthly income.Homeowners who are facing a foreclosure or defaulting on their mortgage may refinance into a fixed rate mortgage, ideally with an interest rate of 4.5%The Federal Reserve is looking into keeping interest rates at a fixed 4.5% for all homeowners.Overall, the requirements needed to be eligible for this refinancing plan from Obama are pretty broad. Over 6 million homeowners qualify for either a mortgage refinance or modification which will save them hundreds of dollars every month on mortgage payments. This money can be used for home improvements, other debts, or for whatever you would like. Do some basic research on potential mortgage lenders and apply for some quotes. Choose the best quote that will meet your needs and proceed from there. Refinancing a home mortgage can be a great thing if it is done right. However, if you refinance the wrong way, it will cost you thousands of dollars and possibly your home. Patience and research are the best ways to ensure the best mortgage refinance possible.
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