Wasn’t the bailout suppose to help homeowners refinance if they were facing foreclosure?

by admin on August 24, 2010

Question:

Wasn’t the bailout suppose to help homeowners refinance if they were facing foreclosure? How? Was there any agency or website to go to in order to start the process?

Answer:

You can try to qualify for a loan program provided by the FHA. The requirements and terms in this loan seem more appropriate and beneficial for your situation. Here are some of the requirements that you should pass in order to avail this loan.

  • You have to prove to the agency that you cannot afford to make the payments.
  • Your mortgage-to-income ratio must be below 31% of your annual gross income.
  • You should not have any income loan stated in your tax statement in order for you to qualify.
  • You must pay any second mortgage before the FHA can refinance.
  • You must be able to pay at a down payment amounting to at least 3.2% of the new loan.
  • Even if the interest rate of your new loan is 0.25 – 0.50 % below the normal rate, you must be able to pay a 1.5% rate of insurance fee.
  • If you decide to sell the property in the next five years, you have to split the proceeds with the FHA. This means that about 90% of the proceeds would go to the FHA.
  • The house or property you are applying a loan for should be your primary residence.
  • Since the maximum amount of loan you can get is based in the current market value of your home, your bank should be willing to write down the mortgage if you are underwater.

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