President Obama and the Government have enacted their home refinancing and modification stimulus plan. This plan will allow millions of homeowners the chance to refinance or modify their current home loan into a new 2% fixed rate mortgage. Taking advantage is easy, and the savings easily add up to hundreds per month.

There are 2 Main Parts to Obamas Stimulus Package:

1) Home Mortgage Refinancing Assistance.

2) Home Loan Modification Assistance.

Here are some details on each of these Components to Obamas plan:

1.) Home Mortgage Refinancing Stimulus Plan

Using this plan homeowners are able to refinance through 2 of the biggest mortgage lenders in the country, Fannie Mae and Freddie Mac, even if their mortgages are worth more than the actual value of the home. The only eligibility requirements are that the home loan is financed or insured by Freddie Mac or Fannie Mae. Even if you are financially secure enough to be able to pay the monthly mortgage payment you can still take advantage of this plan.

Another condition of this plan is that the home to be refinanced is actually the homeowners primary residence. This refinancing stimulus plan from Obama only applies to primary residences not investment, or second properties.

2.) Home Loan Modification Plan

The Obama administration will be giving cash incentives to mortgage lenders who approve loan modification for “at risk” homeowners. Using this program, the homeowner will be able to avoid foreclosure, and get their home loan into a fixed 2% interest rate. Homeowners would also get to waive any late fees they have and their will be no closing costs associated with a home loan modification using this plan. Also, homeowners who take advantage of this plan will be able to get a mortgage payment that does not exceed 31% of their gross monthly income.

Refinancing a home loan using this plan will no doubt save millions of homeowners hundreds of dollars every single month. Taking advantage of this plan is very easy to, and even encouraged by Obama. Homeowners can use this to save their money and improve their standards of living. Also, this plan should restore some consumer confidence in the housing market.

By: Michael Petrone

 

Overview

 

A home mortgage refinancing is an option open to homeowners with equity in their home that is accessible in the form of cash. Homeowners can obtain a loan which essentially means the amount of equity that is in their property can be removed in the form of cash or payoffs of debts.  The additional equity funds are usually borrowed at a lower interest rate, similar to the interest rate paid on the home. This loan replaces the high interest credit card debt that would otherwise be paid. Another reason to refinance the mortgage is pay a lower monthly payment on the existing loan.

 

Pay off debts

 

Sometimes small debts add up. Maybe you purchased a new appliance on a store card when the old one broke down. You may have had to put a tooth extraction on your credit card. You took a trip to the Bahamas and spent more than you planned on food and entertainment while there.  Whatever the reason, you find that your credit cards are all maxed out and the penalties and late fees are costing you hundreds of dollars each month. Some home owners use a drastic plan called home mortgage refinancing in order to pay off a number of outstanding debts that create stress each month when the income won’t cover the outgo for these bills.

 

Put your child through college

 

Another great use for the cash you can obtain by a home mortgage refinancing is to educate your children. College bills are overwhelming today and in order to avoid starting off a career with thousands of dollars in college debt, many homeowners are accessing the equity in their homes to pay for the education of their children. The interest rates are equivalent between a student loan and a home equity loan, so either method is a benefit to your education debts. 

 

Take a vacation

 

Sometimes you have planned a scrimped for a vacation of significance for years and it just hasn’t come together for you. If the children have all left the nest and your business is doing well, a month long cruise in the Bahamas may be just the thing to start on the new phase of your life.  Obtaining home mortgage refinancing through borrowing against the equity in your house to pay for your vacation is certainly less expensive than putting the costs on a credit card.  If you shop for a better interest rate, you can even end up with a lower monthly payment than you were previously paying.

 

Remodel your home

 

Another good use for the cash you obtain through home mortgage refinancing is to remodel or renovate your home. Perhaps you need new carpets or a better room. The kitchen may look dated or you might have your heart set on adding a pool or a 3rd bathroom off the family room. If you use the equity in your home, you can often access the cash to do these projects with very minimal effect on your mortgage payment.

  




By: Alan Lim