Home Equity Rate

With the economic downturn, many businesses are either cutting worker hours or laying off workers completely. As more and more Americans become unemployed, the demand for housing is dropping sharply. This has resulted in a nose dive in home values and a skyrocketing foreclosure and personal bankruptcy rate as homeowners struggle to keep up with their debt payment. Obama has responded to this dire situation by enacting the Home Affordable Refinance Plan.

Under this plan, if you are current on your mortgage payments and you live in the home as your primary residency, you can refinance your mortgage to have a lower rate while having your equity kept in tact. This will not change your principle mortgage amount, however, with the lower interest rate, this will effectively however the monthly payment amount of your mortgage and allow you to be mortgage free sooner. The refinancing must be completed by June 10, 2010.

If your loan is under default, the plan can lower your monthly payments to not be more than 31% of your gross monthly income. Again, the home must be your primary residence. This can result in significant savings for many struggling homeowners.

For those who have large debts due to medical bills and emergencies, the plan allows a homeowner to work with their lender to undergo loan modifications. The end result would be to help the homeowner eliminate their debt.

Furthermore, as part of the plan, the Treasury Department can help you with your debt payment with up to $5,000 towards your principle payment over a 5 year period. This incentive ends on December 31, 2012.

Obama wants Americans to become debt free and this plan provides many options for you and your family to finally become debt free and stay out of bankruptcy.