Do You Qualify For The Obama Mortgage Refinance Program?
You could consider refinancing your home through the federal mortgage home refinance program. But, prior to applying for a home refinance loan with the government scheme, just find out if you are eligible for one by knowing the eligibility guidelines. Here is some vital information regarding the same which you might find useful.
The main benefit offered by the federal mortgage home refinance program is that it allows borrowers to secure mortgage refinance loans that exceed 125% of the total value of the home. Besides, the rates of interest provided on such refinance home loans are significantly lower and therefore, you could get your monthly mortgage installments drastically reduced. Nevertheless, in order to qualify for the government initiative, it could be important for you to meet few requirements as stipulated by the program guidelines. That is why it could be important for you to have a thorough understanding of these.
To get a mortgage refinance loan under the Federal Home Mortgage Refinance Program, an applicant is needed to satisfy the below mentioned terms and conditions.
- Home which is to be refinanced has to be primary residence of the borrower and not an investment property.
- Existing home mortgage loans need to be owned or insured by either Freddie Mac or Fannie Mae.
- Borrowers are allowed to borrow money that is more than 105% of the prevailing home values. But valuations are required to be carried out by government approved evaluation agencies.
- An additional requirement for the Obama mortgage plan states that borrowers should not have missed any monthly payment during the past 12 months and even if there has been a default, it should not have been more than 30 days. Furthermore, the present monthly installments have to be more than 31% of your gross monthly income and total credit payments need to be less than 55% of pre-tax income of the applicant.
- The Loan-To-Value ratio or LTV needs to be between 80% – 105% of the home’s current value.
- Homeowners are no longer required to have 20% equity in their homes for refinancing their homes through the federally backed Obama mortgage refinance plan.
For encouraging lenders to approve more number of homeowners for the Obama mortgage foreclosure rescue plan, the federal government is going to provide incentives worth $ 1,000 for every application approved. This is basically intended to cover up for the closing costs of the refinance home loan provided. To make their task of getting home refinance loans easy, borrowers could seek help from HUD certified housing counselors. These are extremely helpful in negotiating your case with various lenders. Besides, by seeking expert help you could do away with the rigors and the stress generated by the entire process of mortgage refinancing.
To get more valuable information about the Federal Home Mortgage Refinance Program and Government FHA Short Refinance eligibility requirements and process, it is hereby recommended to utilize the professional services offered by reputed online service providers like Obamaloanmodification.
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