Home Refinance Stimulus Package - What is it and Who Will Benefit?
By James A. Kennedy
President Obama has allocated 75 million dollars in funding to the Home Refinance Stimulus Package. The goal of this federal program is to stop the rising tide of foreclosures in the United States. Banks and lenders on the approved lender list are given financial incentives to grant loan modifications to rescue troubled homeowners who face losing their home
The goal of these reworked loans is to achieve a house payment that is less than 31% of their gross monthly income, including property taxes, homeowner's insurance, and homeowner association dues. This is done through a waterfall process, using one or all of the tools at their disposal until the target payment is achieved.
- A reduction of interest to a rate as low as 2%.
- Lengthened loan term as long as 40 years.
- Waiver of late fees.
- Possible reduction of part of the principal.
Homeowners must meet certain guidelines to apply for these modified mortgages under the Home Refinance Stimulus Package:
- The home must be a primary residence, not a vacation home.
- The total loan amount cannot exceed $729,750.
- The loan must have been originally signed on or before January 1, 2009.
- The current mortgage payment, insurance, taxes and homeowners association dues must exceed 31% of the homeowner's gross monthly income.
- Financial hardship must be demonstrated. This means that events beyond the borrower's control have made continuing to pay the high house payment impossible.
- A clear case must also be made, with documentation, that the new modified payment will be quite "workable" and that the loan will be henceforth current.
Millions of homeowners will take advantage of this stimulus money. If you meet these qualifications, you can apply to receive assistance, too. But, you can only apply once, so you need to get it correct the first time. It s best to study the qualification guidelines and fine-tune your application before contacting your lender. This will give you a better chance of success and a much more confident telephone interview.
All figures must be verified by appropriate documentation, so be sure you gather all the necessary paperwork. You don't want to experience unnecessary delay due to an incomplete application. Don't delay; your home is at stake. Maybe you can benefit from the Home Refinance Stimulus Package.
Click here for more information about Obama's home stimulus package.
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