Key Elements Of The Government Mortgage Help Plan

By Author: Woolley Thomas
Total Articles: 61
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The government mortgage help plan is great news for all those homeowners who are facing a challenging time in paying back their mortgage debt every month. And there are many of them now. We all know that the US economy isn't in great shape, and lots of people have lost their jobs in recent times. There are those who have had to settle for pay cuts as well. On top of this, the price of gas has gone up, and this has increased the cost of living. So, with loss of income and rising expenses, it is not surprising that people are falling behind on their mortgage repayments.

The government had to do something about this because the problem was becoming very serious. So, President Obama came out with his Making Home Affordable program to ease the burden of homeowners a little bit. The government mortgage help plan aims to make mortgage repayments affordable for all these people. There are two distinct components in this mortgage help plan - Home Affordable Refinance and Home Affordable Modification.

What Is Home Affordable Refinance?

In this program, borrowers are allowed to refinance their properties into a fixed ...
... rate loan for a 15 or 30 year period. They can do so, and the program will be able to help them, even if the actual money owed is more than the actual value of the home. The rate of payment will depend on the prevailing mortgage rates in the market when the refinancing is asked for. The rate also depends on how many associated points the borrower has with the lender and also the fees.

Once the new program is approved for the homeowner, the person is not allowed to take out cash against the equity on the property for payment of bills.

Qualification for the Home Affordable Refinance

* All the homeowners who have a mortgage securitized by Fannie Mae or Freddie Mac.

* First mortgage should not be more than 105 percent of the property's market value.

* Homeowners should be staying in the property that is being refinanced, and it should always be the primary address of the borrower.

* The homeowner must earn sufficient money to make repayments.

What is Home Affordable Modification?

This is the second government mortgage help plan. Here, the mortgage payments every month can be lowered to as little as 31 percent of the homeowner's gross income every month. In this government mortgage help plan, there are no associated fees or costs involved. Though the lender may or may not provide assistance, but once the money from government is received, the lender is bound to support.

Qualification for the Home Affordable Modification

* Any homeowner who can conclusively prove that he or she cannot make the repayments every month. It could be late payments or the risk of default.

* It is essential for the homeowner to be residing in the property, and it should also be the primary address.

* The mortgage plan should have started prior to 1st January 2009.

* The mortgage including insurance, homeowner association dues, and taxes should be more than 31 percent of the gross income every month.

Visit the site www.governmentmortgageprograms.com to get free information on the government mortgage help plan. This website also shows homeowners how they can receive professional help free or at low cost.