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Refinance with Obama’s Mortgage Stimulus Package

April 21, 2009

Author: Allison K.Watkins


How Much Can You Save?



Obama’s Mortgage Stimulus Package

By introducing the housing stimulus plan which is called the “Home Affordability Stimulus Plan”, the primary aim is to reduce the cost of borrowing and make borrowing an affordable option.

A refinance mortgage loan under this plan is offered at 4.5%. It offers the benefit of lower cost of loans both to the existing home owners and new home buyers. Everyone is of the opinion that such a scheme cannot come at a better time than current economic downturn.

Struggling home owners are looking forward for the implementation of this package. Amount of savings they can make comes to some thousands of dollars every month.

With rising unemployment rates and loss of jobs, double income is a matter of past and every effort to get the best paying job is in vain. The stimulus package announced by the new government is seen more as a saving on home loan repayment plan or reduced cost of borrowing plan.

Extent of benefits in the ‘Home Affordability Package’ announced by President Obama

Existing home owners greatly benefit from this scheme. Home owners are offered refinance loans at reasonable rates even if they owe more than what their house can fetch them. This is indeed good news for all house owners, whose property values have dropped drastically. Although home owners tend to save more on refinancing, it is not always the right option. Mortgage Refinancing is a critical decision; any flaw will be a costly decision putting your house at stake.

By offering these benefits, it certainly helps in avoiding foreclosures and defaults in repayments which is a good sign. Mortgage rates are expected to fall as low as 2% and the payment limit for borrowers might be reduced to 31% of the gross income of the borrower.

Key points in Obama’s Mortgage Stimulus Package

Obama’s Home Affordability Plan has two key aspects or key points of focus.

  • Mortgage brokers and banks are paid incentives for extending loans to those home owners who were initially denied loans as they do not have the required 20% equity on their homes.
  • Offering beneficial plans for existing home owners to modify their terms of mortgage, where their mortgages are backed by Fannie Mae or Freddie Mac. Such mortgages call for a limit on the monthly payments which should not exceed thirty eight percent of the gross total income of the borrower.

17 Responses to “Refinance with Obama’s Mortgage Stimulus Package”

  1. pligg.com says:

    Obama Home Affordability Stimulus Plan aim to reduce the cost of borrowing and make borrowing an affordable option.

  2. Obama’s Mortgage Stimulus Package

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  3. Adam Brown says:

    It seems that nowadays there is an insurance for everything. When you ride a bus, a percentage of the ticket price is to fund your insurance. When you take a flight a large part of the cost of flying is spent on insurance. Going to school, buying at your local supermarket, riding a roller coaster, manufacturing and selling anything all require generous dosages of insurance.
    Adam Brown
    Home Mortgage

    [Reply]

  4. Thanks for sharing this information. I will share about Mortgage Refinancing Using Home Equity Loan ” Home Equity Loans Review with my readers.

  5. I would have to disagree, but When to Refinance ” California Home Loan Advice and Tips is definitely a good read.

  6. It looks like we have similar ideas on this subject.

  7. Thanks for sharing this information. I will share about Refinance Mortgage Rates – What Worked in The Past May not Be Your Best … with my readers.

  8. Not many people know what is being shared here. Thanks for sharing it with us.

  9. This is a very good and informative post. I look forward to see more.

  10. Interest charged on loans is the main source of income for MFIs. Thus they must be high enough to cover operational costs. Since micro lending remains a high- cost operation, interest rates remain high.

  11. When interested in refinancing your home equity loan , you have to take into account lots of factors. First and foremost, you have to evaluate how much you are going to save in terms of monthly payments.

  12. I found your blog on google and read a few of your other posts. I just added you to my Google News Reader. Keep up the good work. Look forward to reading more from you in the future.

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  13. The Broker says:

    Interesting Article. Thanks for the read!

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  14. Mr Sky says:

    Here is my magic secret about mortgage refinance lenders. Is it possible to refinance home loans with bad credit? Nevada, California, Arizona, and Florida are particularly hit hard. If the underwriters believe that the person with the bad credit can make payments, they may refinance with no closing costs. Part of the problem that has been created was due to the sub prime crisis that was created when major banks started to issue lots of risky credit, and then insured those loans with credit default swaps. If you have bad credit and are trying to find a way to refinance your home loan, you would do best to try to talk with your current mortgage loan servicer and see if you can work out a loan modification.

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  15. William M. Davis says:

    Thanks friends for stopping by and leaving your thoughts. This has certainly helped us in better understanding about Refinancing Obama’s Mortgage Stimulus Package, which many Americans are really looking forward to.

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  16. Robin Rogers says:

    I had to wait so long for my disability to arrive, that we fell behind in everything. It is hard to live paycheck to paycheck. It would be so much easier to get a lower interest rate of 6 percent and be able to catch up on all utilities bills, have taxes and house ins. put in my mortgage. we are a family of 5 struggling day to day, to save the house keep lights, heat etc… Lets not forget food. Also the medical bills i have unbelievable. If you can help pleas reply if not i will keep trying Thank you the Rogers family.

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  17. According to a recent poll, only 82% of Democrats would re-elect Obama if they could vote today. They voted for hope and ended up with change.

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