HomeWith the Making Home Affordable plan, lenders must work with homeowners to reduce their monthly payments to 31% or less of their income currently being earned. Between the failing real estate market and the recessionary state of the economy, it is not unusual to find homeowners who are paying up to 50% of everything they make monthly on a mortgage payment alone.
Lending institutions must adhere to the guidelines of this stimulus package by offering a 2% rate on existing loans, thereby reducing the percentage of income being paid out on a mortgage. Their costs are covered by the government’s cash incentives.
If you are seeking a home mortgage refinance under these terms, you must be aware of the qualifications. These include being current on your mortgage payments now and for the previous 12 months. If any of your payments fell more than 30 days behind, then you are not eligible. You may also need to sign a Financial Hardship letter which states the reason for your loss of monthly income. Any homeowner who has seen their property devalue by more than 15% could receive the 2% interest rate, as well as anyone who financed their home through Fannie Mae or Freddie Mac.
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