Do you Qualify for the new Foreclosure Prevention plan?

The President today released his fix to help millions of Americans stay in their homes. The initial price tag is a mere $75,000,000,000. This program is broken down as follows:

1)Loan Modifications- This is where your mortgage contract is changed to usually drop your interest rate and or increase your payment time. 

To qualify you have to do the following.

A)Demonstrate a hardship ( loss of job, sickness, etc.).

B)Owner occupied homes only.

C)Fully document income.

D) Jumbo loans do not qualify.

The lender will look at your situation, if you qualify, lower your payment to know more than 31% of your gross income. In other words if your gross monthly income is $10,000 a month your mortgage payment could drop to $3100. To sweeten the deal borrowers that pay on time could get up to $1,000 a year for the first 5 years.

The second part is to help those homeowners who cannot refi due to dropping property values.

Right now if you owe more than your property is worth you cannot take advantage of these historically low rates. This program allows lenders to refinance you up to 105% of your property values. Recently you could not refi unless you had 20% equity. This is also for the owner occupied, non Jumbo loans that can prove income and assets. As always if you have any questions about this or anything else mortgage related email me. chris@themtgmaster.com