Can You Refinance?

[Apr 13, 2009.]

 

There has been a lot of talk about the plans the Obama Administration has to help homeowners who are unable to refinance because of falling home prices, which has left them very little or no equity in their homes. Unfortunately, very few details have emerged to help guide these homeowners.

Ultimately, the Obama Administration wants to help these homeowners lower their monthly payments to help them avoid foreclosure which would help stabilize the real estate market. They are also betting on hope that these homeowners will begin to spend the monthly savings resulting for the refinance to stimulate the economy.

There is a new website available to help assist homeowners determine whether they will be able to refinance under Obama's new plan. The MakingHomeAffordable.gov site was designed to walk homeowners through the eligibility requirements for both mortgage refinances and loan modifications under the new plan.

One requirement is that the current loan is owned by either Fannie Mae or Freddie Mac. The new site provides links to online look up tools for homeowners that are unsure of who owns their mortgage.

Other requirements to refinance include:

• The homeowner owns a one- to four-unit home.


• The homeowner is current on their mortgage payments and have not been 30 days late making a payment within the past 12 months.


• The homeowner's mortgage is no more than 105% of the value of their home.

Homeowners who believe they are eligible for the "Making Home Affordable" program should contact their mortgage servicer - the company they send their mortgage payment to. It's important to note that not all servicers are currently accepting applications and they are still in the process of preparing themselves for the new program. Homeowners are encouraged to be patient but persistent in their attempt to refinance under this new program.

 

About Author:

Chris Rocks is the Regional Director of the National Credit Federation (NCF), a consumer advocacy group that assists small business owners and consumers overcome debt and credit challenges.