Home Affordable Refinance Plan
In the US, underwater mortgages are creating huge problems in the housing market. However, the recovery is slow in the housing market but the foreclosure rates are still high in most of the states in the US. In this tough economic situation, people are still struggling with their mortgage repayment plans. Therefore, the Obama refinance plan can be beneficial for the distressed mortgage borrowers.
This mortgage refinance plan introduced by Obama can be beneficial for the borrowers to save considerable amount each month. As a result, it can help the real estate market to give a required boost. This plan can help to lower the interest rate, so it can help to lower the monthly payment as well. The Obama Refinance Plan is an extension of the HAMP program.
Home Affordable Refinance Plan is popularly known as Obama Refinance Plan. The government introduced this plan in order to revive the shrinking real estate market after the recent economic meltdown.
This plan is designed by the “responsible borrowers,” who can manage to save up to $3,000 a year. According to the President, people are considered to be “responsible borrowers” who are current on their payments for last six months. However, the borrowers can reap the benefit of the plan only if the individual has a credit score more than 580.
The borrowers need to check whether the loan conforms to the FHA limits for the different counties. Generally, the loan limit may vary on the basis of location of the home. The loan is limited for the borrowers who are refinancing their primary mortgage.
According to the HARP plans, it has been limited to people whose loans are backed by Fannie Mae and Freddie Mac with a loan to value below 125%. The Obama Refinance Plan is designed for the borrowers whose home loans are sponsored by other lenders. This is beneficial for those who have been locked out of other mortgage assistance programs in the past.
The application process is also modernized and it helps to make the process fast and avoid lengthy procedure. However, you need to ensure whether the appraisal process, the tax returns requirement and verification of employment are removed.
Another benefit of the Obama Refinance Plan is that the closing costs paid by the government on behalf of the applicants. If the duration on the refinance is more than 20 years, then this provision is available for the borrower.
Therefore, the new refinance plan introduced by Obama can be beneficial for you to protect your shelter from foreclosure.