Newsroom /
Finance
/
Finance
/
Government Mortgage Assistance To Help Avoid Foreclosures
Government Mortgage Assistance To Help Avoid Foreclosures
Government mortgage assistance can help avoid foreclosures by modifying existing mortgages and refinancing people’s homes.
Not Applicable,
Not Applicable,
United States of America
(prbd.net)
29/12/2011
Government mortgage assistance can help home owners avoid foreclosures. They should definitely learn about the government guidelines to avoid a situation of foreclosure in this difficult time of recession. President Obama announced the mortgage assistance plans on February 18, 2009. These plans are a part of the Homeowner Affordability and Stability Plan.
This program aims to provide $75 billion assistance to struggling homeowners. There are two main goals of this program. One is to help the existing homeowners avoid foreclosures. The second is to help the current homeowners refinance their mortgage. Refinancing will help these homeowners make lesser payments every month by using fixed-rate loans.
People who are not able to pay their monthly mortgage payments qualify for the former government mortgage assistance. People who think that they will not be able to pay their installments in the near future should also consider this option. If someone is not able to pay his monthly mortgage payments, he can work with a lender to modify the terms of the mortgage. If the lender agrees to lower the amount the borrower pays every month, the borrower can avoid foreclosure.
However, this decrease would last only about five years. After five years, it will increase to what it originally was. With the government’s program, the borrower may qualify for a reduction in his principal balance if he is able to make payments on time. Lenders also benefit by receiving incentive payments for the loans they modify. However, this program will only benefit people who reside in their homes. Nobody will be eligible for this program after 2012. People can check the government’s website to see if their lender is participating in the government’s program.
People who are up-to-date with their monthly mortgage payments are the ones who fall in the latter category. These are the people who are not able to refinance their home as the value of their home has gone down. The government mortgage assistance program has refinance options available for them. Under this plan, the homeowners would need at least 20 per cent equity to qualify for refinance. This program also helps people with no equity and even negative equity.
Another qualification for refinancing homes is that the homeowner’s home should either be financed by Freddie Mac or Fannie Mae. You could either check the government’s website or contact your lender to determine whether you qualify for the loan or not. This plan is not for people whose home’s value has become very low. This has happened with many people in California. The value should not have plummeted below 5 per cent of the original. However, even a small amount of equity increases your chances for qualifying.
The main eligibility factor for government mortgage assistance for people going in for refinance option is that they should be consistent with their monthly payments. These homeowners should also have been making their payments within 30 days of the due date consistently within the past one year.
You can learn more about government mortgage assistance or get help by filling a form at the given link.