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Home loan mortgage refinancing

Updated on September 22, 2014

Obama's new stimulus package includes the 'Make Home Affordable' program for homeowners that promises to help up to 9 million people that are potentially facing

The 'Make Home Affordable' program has two primary aspects to it, there is the 'home loan mortgage refinancing' option and the 'home loan modification' option.

Both of these options come with different eligibility rules that need to be met in order to qualify for the program. People considering applying to the plan need to understand the differences between the two options and what the eligibility criteria is for finding out if they are even going to be considered as viable applicants.

You should also be aware that meeting the eligibility criteria for the program is just the first stage of the process and that there are no guarantees that even if you find you are eligible for either the mortgage refinance or loan modification options that you will definitely be accepted onto the program.

You should also be aware that once the details of any refinancing option are worked out that there is a possibility that you may not actually be better off after changing the terms of your loan. You need to assess the details of the 'good faith estimate' for the new arrangement and see if the deal does improve your financial situation, if it doesn't then you do not have to proceed.

A HUD-approved housing counselor can provide help and advice on the whole process of 'Make Home Affordable' and this advice is free.

Home Loan Mortgage Refinancing

Eligibility rules for mortgage refinancing 'home affordable refinance program'.

  • Your property loan has to be guaranteed or owned by either Freddie Mac or Fannie Mae
  • You cannot be in arrears on your mortage
  • the loan amount for your first mortgage cannot be more than 125% of the value of your home based on a current market valuation
  • You must be able to afford the new payments
  • refinancing will improve the stability or long term affordability of your loan based on a good faith estimate

This is the start point for eligibility and if you think you meet the requirements you should get in touch with your lender to start proceedings. There may be some costs involved with refinancing and you will need to ask your lender what those costs will be.

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Home Loan Modification

Eligibility rules for loan modification 'home affordable modification program'.

  • You have to be the owner and occupier of a 1 to 4 unit home i.e. if there is more than 1 unit you need to be living in one of the available units
  • On a single unit you cannot owe more than $729,750 on the principal balance, this is the maximum loan amount
  • The mortgage must have been secured before the 1st January 2009
  • Your total monthly payments for you mortgage must be 31% or less of your gross monthly income
  • You must have the ability to provide documented evidence to support your claim of financial hardship

If you think you meet these requirements the as for the refinancing option the start point is to contact your lender and advise them you are interested in getting on the 'make home affordable program. Also if you are unsure about the proceedings you can get free advice from a HUD approved housing counselor.

You can find out more on refinancing a home mortgage using this link. This post gets into the nitty gritty of exactly how to make an application to the HAMP (Home Affordable Modifications Program).

Where to find out more

One of the best places to get your questions answered on the 'Make Home Affordable Program' is via this link FAQ

You will also find out information about all the other initiatives that have been added to the program since the first two primary initiatives of 'Home Affordable Refinance Program' and 'Home Affordable Modification Program'

Let us know your experience of the 'Make Home Affordable' program, has it worked for you?

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      anonymous 4 years ago

      Hi I am from Australia and this has affected us over here too. The real estate market is not booming here, it is very tight indeed. The owners where I currently live are going through foreclosure, and because of this, I have to move house too. My rent money was supposed to help them out, but the banks want their money back now! Very sad.

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      Weblady 7 years ago

      Its nearly as bad in the UK with house prices dropping and people getting made redundant but I don't think there is as much help available as there is in the States.

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      kirstyrebecca 7 years ago

      Great information for people in trouble with their mortgage.