Obama Refinance Plan Encourages Home Owners to Get Lower Mortgage Rates

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The Obama Refinance Plan was established back in March of 2009 and has done a lot to allow home owners to refinance. Prior to the plan, it was very difficult to go through the refinance process with a loan-to-value of anything above 95%. That has all changed as the new plan allows you to go through the mortgage application process with a loan-to-value of over 100%. With the great fall of the housing market, many homes are under water, meaning that the owner owes more than the house is worth.Much of this is not the fault of the home owner as there may have been a foreclosure or short sale in the same neighborhood. If this is the case, the value of a home can drop as much as 20% in a few short months. This seems to be happening all over the United States and President Obama wants to do everything in his power to not let this harm the housing market even more than it has.Current mortgage rates are near historic lows which will give new home buyers and home owners a chance to save a lot of money if they can access the rates. Prior to March of 2009, it was very hard to access these rates as lenders were being very stingy. The recent memory of the subprime mortgage crisis has been etched in the brains of many of these lenders and they are not willing to go through the mortgage application process with anyone that many be any risk of defaulting; now that has all changed with the Obama refinance plan.

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