The Obama Mortgage Refinance Plan came into effect in March. It is intended to help every American to get access to astonishingly low mortgage rates. Obama was elected as the president based on his strong principles, and determination to bring about a "Change". He has lived up to the expectations of his followers. He has opened up an avenue for every homeowner in America. With mortgage rates coming down by 5% for a year, people can save a lot of money by refinancing mortgage loans at these low rates.
Foreclosures and defaulting has been skyrocketing. Housing market has been in a dreadful state. Banks and lenders are willing to settle down for a compromise with the borrowers to avoid another foreclosure. The new mortgage refinance program developed by the government has put together over $75 billion dollars. The plan includes facilitating lenders by giving them cash to help homeowners. This money acts as a motivator for lenders to take the risk, and grant mortgage modification to borrowers.
Here are some of the key benefits for the homeowners:
- The monthly mortgage expenses must not be more than 31% of a homeowner's gross monthly income. This gives people a chance to save some money, or clear off other debts.
- The interest rates applied on the loan can be decreased to as low as 2%. This will radically bring down a homeowner's monthly mortgage payments.
- The terms and condition to avail a home mortgage refinancing have been made liberal. Earlier, with stringent rules, it was difficult for people with medical bills, credit card debts, or other debts to get mortgage refinance. However, now their financial complications will not be a hindrance in getting approval for refinancing mortgage loans. Even homeowners, who were denied loan modification in the past, may be permitted one now.
- People with upside down loans can also get the help of refinancing through this plan.
- No closing costs or fees will be applied to homeowners who use this plan to refinance mortgage.
People all across the U.S. have been encouraged to undertake loan modification in order to stabilize their financial condition. Households should take advantage of this opportunity to the maximum.
