March 20, 2009

Government "Making Home Affordable" website

As part of the new initiatives to help homeowners with mortgages they can't pay the government has launched a website Making Home Affordable.

The site has some basic info on the programs and who can qualify.

In short there are 2 programs: refinancing and modification. Below are basics on the programs. For both of these the home has to be your primary residence.


To be eligible:
Your loan is guaranteed by FannieMae & Fredie Mac.
You are current on your payments
Your mortgage isn't significantly more than what the home is worth.
LTV (loan to value) not to exceed 105%.

You get refinanced at a 30 year fixed mortgage at prevailing rates at around 5%. This type of situation is for people who can generally afford their home but maybe they've got an ARM coming due or otherwise need/want to refinance. But they might not be able to refinance if they are at a high LTV (loan to value) ratio, or in other words they have low equity.


This is for people having real troubles. They have difficulty paying their mortgage payments or are already behind on payments. Their mortgage is over 31% of their income.

With modification you can get your mortgage interest rate dropped as low as 2% temporarily and then up to 5% level later and they can extend the loan to 40 years. There are also incentives to pay the borrower and lender.

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