Making Home Affordable Refinance Plan: Mortgage Refinance

President Obama’s Making Home Affordable loan modification plan seeks to help up to 5 million homeowners facing the possibility of losing their homes due to unaffordable home loans. The plan is funded by $75 billion dollars and offers a unique feature that pays lenders, servicers and borrowers to participate in the loan workout program. To date, only a little over $1 billion has been used, so there is still plenty of funding to help at-risk homeowners with a loan workout. Here is some information on the plans major features and who will qualify for this loan modification program called HAMP for short.

Homeowners who are in a “Financial Hardship” can now apply for a fixed rate 2% home mortgage refinancing or modification using the guidelines set up by Obama in his Making home affordable refinance plan . The savings that homeowners are reporting who have taken advantage of this plan are in the hundreds of dollars. The “Financial Hardship” can be anything from loss of job, loss of income, hospital bills, car payments, a bad mortgage, or a whole list of other things. Include a handwritten letter stating your financial hardships and sign it.

The ultimate goal of this “Making Home Affordable” package is to increase confidence in the housing market, help struggling homeowners, and prevent foreclosures. This will be done by using part of the $75 billion homeowner bailout package, approved by congress, to give cash incentives to mortgage lenders and banks to approve at risk homeowners for a mortgage modification or refinance. So with even more incentives to refinance your home, mortgage lenders will be more flexible on who actually gets approved and how much they are able to work with you.

Interested homeowners can find out if they might qualify for this loan modification program by figuring their debt ratio and determining if it is possible to reach their target payment based on 31% of their gross monthly income using the options mentioned above. Do you know how to compute your debt ratio to pre-qualify yourself before you contact your lender to apply? Take advantage of a software program designed just for homeowners that mimics the formula for HAMP approval. Simply input your own income and expenses and the calculations are done automatically. See your debt ratio, new target payment and interest rate and more immediately.

This plan from Obama is a great chance to help a lot of homeowners get their finances in order, save money, and possibly save their home from foreclosure. Refinancing or loan modification using this plan will save hundreds of dollars for you every month, in interest payments alone. Homeowners owe it to themselves to at least look into the potential savings that can be had from this plan.

Learn more about Obama Mortgage Relief Plan Qualifications.