How you can get a Government Assistance Mortgage
There are new government assistance programs that are now available for loan modifications and mortgage refinancing, however there are certain restrictions that come with these programs. If you are having problems with your current loan,you may want to look at some options that may qualify you for a government assistance mortgage.
The Obama administration has recently implemented a $ 75 billion dollar plan as one of its new foreclosure prevention efforts known as the Homeowner Affordability and Stability Plan or HASP. The plan is designed to help those who are in financial trouble and that risk a foreclosure on their homes.
As news of the plan emerges, many homeowners are left wondering if they would be eligible for the HASP. The plan will help approximatley 9 million mortgage holders that are in need of refinancing that are in the risk foreclosure.
One of the major components of president Obama’s plan is helping the homeowner refinance their mortgage to a more affordable rate. The idea of the HASP is to have the government lower the interest by paying down the borrower’s rate to more manageable monthly payments.
Another component of the plan is to offer cash incentives to lenders in order to get them to re structure mortgages for their clients. Some of the modifications would could possibly include the lengthening of amortization schedules, lowering the principal, reduction in interst rates or all three strategies in order to keep borrowers from defaulting on their payments.
Some of the criteria in order to qualify for the government assistance mortgage plan would require that the homeowner have a minimum of 20% equity in their home and the majority of mortgages will have to be owned or insured by Fannie Mae or Freddy Mac. The government may make some exceptions for FHA backed mortgages, however large mortgages over $ 720,000 will not be eligible for government assistance.
Home owners will have to prove that their total monthly mortgage payments and other house related costs exceed 31 % of the total monthly net income in order to be considered for the HASP.The big issue for most home owners, will be the ratio of debt in relation to their home value, because those who are seriously behind on their mortgages will not be eligible for the government assistance mortgage plan.
The plan also only includes assistance for the homeowner’s principal residence, those that have secondary home’s such as summer cottages for example will not be able to refinance their mortgages for those properties. Also those that own commercial real estate or purchase properties to flip will not be able to recieve assistance either, unless it applies to their main principal residence.
On a positive note, homeowners who are heavy in debt due to other non real estate obligations such as car loans, and other credit debts may still qualify for a mortage refinancing if they agree to take a HUD certified debt counseling course, however that is an infinitely much more appealing option than to losing one’s home to a foreclosure.
For more information in regards to receiving a government assistance mortgage,or HASP you can visit
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