With Obama’s New Plan it’s a Great Time to Refinance

by admin on March 5, 2009

With the details of Obama’s Home Affordable Program, released just yesterday, one of the key programs is for Loan Refinancing. If you have a loan owned by Fannie Mae or Freddie Mac, there’s never been a better time to refinance your mortgage. With interest rates hovering around 5% (and sometimes lower) you can shave hundreds of dollars off your monthly mortgage payment if you refinance.

The Loan Refinancing Program requires that you stay current on your loan payments. This is an important point, because many people looking to get a loan modification from their lender are told they need to skip a couple monthly payments before their lender will even talk to them. To qualify for this plan, your loan balance can be no more than 105% of the current value of your home. This will leave out many people in Florida, California, Nevada and Arizona as the value of their loan often exceeds 105% of the value. The real key is when you bought the house, if you purchased the home in the last 2 years and put no money down, there’s a strong chance you won’t qualify. If you bought the house 8 years ago and put 20% down, you are probably just fine and should take adavantage and get yourself a much lower interest rate.

It’s important to find out who owns your loan, before you consider applying for this plan. If Chase, WAMU or Countrywide own or guarantee your loan then you probably won’t qualify. If you have been over 30 days late on a payment in the last 12 months you are also excluded, so stay on top of your payments.

Just because you may not qualify for a mortgage refi under this new plan, doesn’t mean you shouldn’t consider refinancing your loan. Right now you can , so there are additional options out there. Explore every opportunity you can, right now is a great time to lock in low rates so you can live in the house you want for the rest of your life.

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