The federal housing finance agency has stated President Barack Obama’s home refinance plan has been extended up to June 30, 2012 so more households can benefit from the program. The Obama refinance program is a part of federal government’s making home affordable initiative to help struggling home owners save their homes by availing affordable mortgage terms and conditions, and reducing their monthly payments. The program is available for mortgage borrowers who owe 25% or more on their mortgages than what their homes are worth in the market today. The basic issue is in the recent times due to the economic recession, the market value of real estate and property has sharply declined in many places. So homes are worth less today than what they were when the mortgages were taken out. The mortgage loan is secured through a collateral agreement in which the house itself acts as a guarantee, and lenders have provided loan facilities in the past keeping in mind the market value of the house at that time. Since the market values of the homes have declined today, lenders don’t have enough financial guarantees to secure the mortgage loan. Moreover, due to tough financial times, home owners find it difficult to make their monthly mortgage payments. Many home owners are currently facing foreclosures, or likely to face them in the near future. The Obama housing plan is specially designed to help these individuals avoid foreclosure, and save their homes.
Eligibility for Obama Refinance Plan
To avail the benefits of the refinance option, it’s required to become eligible for the plan. RefinanceITT provides special eligibility related services which can help you qualify. The eligibility criteria needs to be carefully worked out, and our mortgage attorneys can help you by studying your current mortgage status and working out your monthly mortgage payments after analyzing your debt-to-income ratio i.e. how much you earn every month and what your monthly overheads are. The eligibility for the Obama refinance plan consists of:
- The applicant should own the home and be residing in it
- The mortgage loan should be owned or backed by either Freddie Mac or Fannie Mae
- The applicant should not be more than 30 days late on the mortgage payments within the past 12 months
- The primary mortgage should be less than 125% of the home’s market value i.e. if you owe $125,000 on your mortgage, the current value of your home should be less or equal to $100,000.
Advantages of Obama Refinance Plan
Unlike the Obama loan modification program, the refinance option helps you get a new or fresh loan after redeeming your existing mortgage. The main advantages of the refinance plan are:
- Reduction in your mortgage rate
- Get a fixed rate mortgage if you’re currently having an adjustable rate mortgage
- A reduction in your mortgage term
RefinanceITT and Obama Refinance Plan
- Documentation
Unlike Obama loan modification, the refinance option is slightly complicated. RefinanceITT’s refinancing experts will study and determine exactly what type of documentation you need, and guide you with your paperwork.
- Refinance Application
RefinanceITT’s refinance attorneys can prepare a convincing hardship letter stating your inability to make your mortgage payments, and work out your making home affordable program refinance application.