One of the items you have likely seen in recent mortgage news is the “Making Home Affordable” program. This is a government program designed to help people refinance their home loans in order to avoid foreclosure.
Mortgage news reports show that many people are having trouble refinancing because they do not have enough equity in their homes. “Making Home Affordable” aims to help homeowners restructure their loans so that mortgage payments are more affordable. The program also helps responsible homeowners take advantage of today’s low mortgage rates by offering special opportunities for refinance.
Qualifying for Making Home Affordable
Mortgage news sources report that you must meet certain criteria to qualify for loan modification under “Making Home Affordable.” Loan modification may involve a lower interest rate, longer repayment term, or a reduction in principal. In order to qualify for loan modification under “Making Home Affordable,” your mortgage loan must have been obtained on or before January 1, 2009. Additionally, you must owe less than $729,750 on your mortgage and have documented income.
Next, mortgage news reports point out, you must show financial hardship, and be able to demonstrate that your mortgage payment is no longer affordable to you. In many cases, those with re-setting mortgage interest rates and balloon payments fall into this category ― these situations can lead to sudden higher payments that may be too much to handle.
If you are approved for the “Making Home Affordable” program, your home loan will go into to a trial modification. If you can afford your new payments for a few months, then the mortgage lender can make the modification permanent.
Your loan should be in danger of going into default without the loan modification. However, your loan does not need to be backed by Fannie Mae or Freddie Mac in order to be modified using this program. According to mortgage news sources, the goal of “Making Home Affordable” is to prevent as many foreclosures as possible.
Refinancing with Making Home Affordable
In other mortgage news, the federal government has initiated the “Home Affordable Refinance Program” (HARP), included as part of the Making Home Affordable act. Mortgage news reporters point out that Home Affordable Refinance Program is for responsible homeowners interested in lower payments.
Because housing values have dropped, many homeowners find themselves unable to take advantage of record low rates due to a lack of equity. The refinance program will allow those who owe up to 125% of their home’s value to refinance.
However, mortgage news sources warn that in order to qualify for the refinance program it is necessary to have a loan backed by Fannie Mae or Freddie Mac. You must be current on your mortgage payments and have the income to afford the new mortgage payment. Additionally, your home loan must have been originated on or before January 1, 2009.
There are mixed mortgage news reports about the success of the “Making Home Affordable” and “Home Affordable Refinance” Programs. But if you are interested in seeing how these might benefit you, it is possible to talk to your mortgage lender about your options.