HomeAccording to the package, homeowners are eligible to modify the terms of their mortgage so that the monthly payment equals 31% or less of their gross income. Because of economic woes and the failing real estate market, many Americans are now paying up to 50% of their monthly income for their home alone.
Banks and mortgage lenders have received a set of guidelines as part of the Making Home Affordable plan. They can offer a 2% mortgage rate, if that will help reduce the ratio of payment to income. Cash incentives from the government will help pay for this reduction.
For the homeowner who is looking for a home mortgage refinance, they must first qualify to be eligible under this stimulus plan. They must be current on their loan in the last year and must not have made any payments more than 30 days past due. They are required to sign a letter of Financial Hardship stating that their income has been reduced, for whatever reason, in order to qualify for the 2% interest rate. If the property value has fallen by 15% or more, than the fixed 2% rate may also be an option. Anyone who financed their home with Freddie Mac or Fannie Mae is eligible for modification.
Home Mortgage Refinance