Need Mortgage Refinance

If you are looking to get a home mortgage loan modification that allows you to take advantage of Obama’s new stimulus package you will need to understand the rules that have been applied to know whether you actually qualify for this type of loan modification.

The first general rule is that you should be struggling to make your mortgage payments if you are meeting your mortgage payments comfortably then you are not going to qualify. So what exactly do the stimulus package rules say for loan modifications: -

• You have to be in residence of a single family home
• Your total repayments including capital repayments, interest, tax and insurance must be more than 31% of your gross income (from March 2008)
• Your mortgage balance must not exceed $729,750 for a single unit but for multiple units the amount can be up to $1,403,400 for the maximum 4 units
• Your mortgage pre-dates the 1st of January 2009

What you should also know: -

The scheme ends on the 31st of December 2012

Not all the mortgage lenders are participating in the scheme, despite there being incentives in place to encourage them to do so.  Also if you are trying to secure the deal on a home that you have bought as an investment and it is not your primary residence then you will not qualify.

Some loan agreements and financing preclude you from taking part in the scheme and ultimately it is the loan provider that decide whether your particular circumstances are suitable for the scheme or if offering you the loan modification is not in their best interests or the  best interests of their investors. Which means in a nutshell that getting on the scheme is not a given even if you meet all the other qualifying criteria.

Advantages over the mortgage refinancing option:

• it is unlikely that you will be required to go through a new credit check
• processing the application should be much quicker than the mortgage refinancing option.

This is the 2nd of 2 prongs of  Obama’s initiative on giving aid to people facing financial hardship over home ownership, the option will not suit everyone and any changes to you current arrangement should be carefully considered and the proper advice regarding your specific circumstances should be taken into account.

For the mortgage refinancing details please refer to my previous post.