US Homeowners beware

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by: Jim Grayson
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Word Count: 309
Date: Sat, 20 Jun 2009 Time: 6:47 PM
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Currently in the United States home owners are able to take advantage of nearly unprecedented low mortgage rates. However, with today's housing crisis, many people are having trouble refinancing their mortgages to take advantage of these record low rates because their home prices have dropped so much that they no longer have a 20% equity in their home in order to refinance. This means that people who have made monthly payments on time and have excellent credit are not able to refinance.

However, the recent economic stimulus plan passed by Congress and signed into law by President Obama promises some relief to responsible home owners who just want to be able to lock in these lower rates and reap the savings that they will provide. According to the details on the plan, available on financialstability.gov, homeowners whose first mortgage is backed by Fannie Mae or Freddie Mac may modify their loan as long as, "the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible."

This largely depends on agreement on the part of the second mortgage holder and a home owner's continued ability to make payments under the terms of the modified agreement. By taking advantage of this portion of the stimulus, known as the "Homeowner Affordability and Stability Plan" there will be definitive savings for home owners. However, if a home owner currently has an interest only or an ARM, they may not see an immediate reduction in payment, but more of the money will go towards satisfying the mortgage principle. If a home owner already has a fixed rate mortgage, they will most likely see an immediate and substantial reduction in their monthly payment amount. Full details on eligibility and program terms will be available on March 4th.

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So if you are having trouble making your monthly mortgage payments and you are considering other forms of debt consolidation, be sure to look into this plan to see if it will help you. Also debt-free.org.uk are here to help with any debt related issues, over the phone or online.