Mortgage Rescue Plan To Rescue The Homeowners
Due to financial crisis, many homeowners have been struggling to make the payments of their monthly mortgages. They are almost at the edge of losing their homes. To overcome the situation, Obama government has launched a great plan to lower down the burden of homeowners monthly mortgage payments.
According to this mortgage rescue plan Obama government has targeted about 9 million homeowners who are in deep crisis. Under this plan, mortgage giants Fannie Mae and Freddie Mac will provide the refinance facility to 4 to 5 million homeowners. And, the rest 3 to 4 million homeowners who are unable to pay their monthly installments will get incentives that will reduce the monthly payments.
However, there are millions of borrowers who are in the crisis and have difficulty in paying monthly payments. But all of them do not qualify and hence are not eligible to avail the facility provided by this plan. If these people meet the following criteria, they are eligible for Obama rescue plan:
- Your home should be primary residence.
- The amount you have loaned on your first mortgage should be equivalent or less than $729,750.
- You must have genuine problem in paying your mortgage amount. (Normally, it could happen due to rise in your mortgage amount or abrupt reduction in your income or possibly both).
- You should have gotten your current mortgage before January 1, 2009.
If you full-fill the above requirements then you will get the following facility:
- Reduction in interest rate (merely 2%).
- Flexibility to extend the loan term up to 40 years.
In extreme conditions, when the homeowner is really bankrupted then this plan provides additional advantage i.e. forbears a part of the principal amount until loan is paid off.
However, under this plan your lender cannot lower your mortgage payments more than 31% of a borrowers pre tax monthly income.