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Help! Do I Qualify For Housing Assistance?

Many people all over the country, as well as locally in Boulder and Denver, are wondering if they qualify for mortgage help under the Obama administration plan.  Homeowners may be in one of two scenarios.  For instance, many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates becasuse the value of their home has decreased.  Others are unable to make their monthly payments because their interest rate has increased or they have less income.  The administration’s housing plan provides two types of assistance that are designed to help make mortgages more affordable for up to nine million homeowners.  Find out what the assistance options are and how to qualify.

According to MakingHomeAffordable.com, eligible for refinance under certain circumstances.  The first is that your loan must be Freddie Mac or Fannie Mae owned or guaranteed.  Second, you must not have missed any loan payments in the past 12 months.  Kimberly Lankford goes on to explain that owners with more than 20% equity in their home can refinance their mortgatge at today’s low rates and decrease their monthly payment by hundreds of dollars.  But people whose home values have dropped significantly often have a tough time finding a lender that will refinance into cheaper loans.  This program is supposed to help that.  The guidelines explain that to be eligible, your first mortgage must not exceed 125% of the current market value of your home. For example, if your property is worth $200,000 but you owe $250,000 or less on your first mortgage, you may be eligible. The current value of your property will be determined after you apply to refinance.  Remember, the deadline is June 2010.

The second part of Obama’s plan includes a loan-modification program which helps homeowners who are struggling to make payments; the program is based on the belief that these owners should get to stay in their homes and avoid foreclosure. The administration’s plan requires participating loan servicers to reduce monthly payments to no more than 38 percent of the borrower’s gross monthly income.  Luke Mullins of US News explains further that the government would then chip in to bring payments down further, to no more than 31 percent of the borrower’s monthly income. In lowering the payment, the servicer would first reduce the interest rate to as low as 2 percent. If that’s not enough to hit the 31 percent threshold, they would then extend the terms of the loan to up to 40 years. If that’s still not enough, the servicer would forebear loan principal at no interest. The plan does not, however, require servicers to reduce mortgage principal.

This is a summary of the housing help in a nutshell.  To find out if you are eligible go to MakingHomeAffordable.com. 

 

 

Tags: Tags: boulder, denver, fannie mae, foreclosure help, freddie mac, homeowner, interest rate, loan modification, Obama administration plan, refinancing

This entry was posted on Sunday, July 26th, 2009 at 5:29 pm and is filed under Colorado Round Up, Focus on Boulder, Market Conditions, Selling Thoughts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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