Seek Assistance From Government Mortgage Help Plan
President Obama has taken a significant step to make housing affordable to the American public who are in financial distress. Through various schemes like Government Mortgage Help Plan, Americans now have opportunities to modify or refinance their mortgage and make their monthly payments more affordable.
Simply put, Government Mortgage Help Plan is designed with an objective to assist homeowners in refinancing their mortgages even if they are in a tight corner. For example, if they owe more than their home's current value. Primarily, the features of this mortgage help plan is to help responsible borrowers afford a chance to reduce their monthly principal and interest payments and also provide borrowers options to move from their current risky loan structure to a more comfortable and stable product.
However, many people seem to have certain queries on this scheme. Here are answers to some frequently asked questions.
Do the borrowers have options to obtain the refinance flexibilities from lenders other than their present borrowers?
Yes, many lenders do provide refinancing options for different scenarios depending on the borrower's situation and preference.
How do you explain the term movement to a 'more stable product'?
Here a borrower can move from:
* A mortgage loan that has interest only feature to a fully amortizing mortgage product. A fully amortizing product is one in which both the principal and the interest is paid fully through scheduled installments by the end of the loan term. * An adjustable rate mortgage (ARM) to a fixed rate mortgage (FRM) product. A fixed rate mortgage product is ideal for someone who feels comfortable paying a guaranteed fixed rate of interest. However, the monthly installment of FRM tends to be higher than that of a product having an adjustable rate mortgage. A borrower, therefore, will need to do his or her homework judiciously before deciding on a switchover. * The existing ARM to a new ARM that has an initial fixed period of five years or more. * A 30 year fixed rate mortgage product to a product having accelerated amortization of principal and building of equity, that is a FRM of 15, 20 or 25 year duration.
How will the borrowers and lenders determine which of the refinances or modifications under the Government Mortgage Help Plan is best suited to them?
The Government Mortgage Help Plan addresses the problem faced by millions of American homeowners who are in a crisis because their property value has fallen, and hence they are unable to benefit from the low mortgage rates that are available now for refinancing. The borrowers must clearly understand that the loan modification program has an objective to prevent foreclosure for borrowers who are or in danger of default. Each mortgage plan has clear guidelines on qualification.
Is there such a condition that the existing mortgage and the new mortgage represent the same occupancy?
Fortunately, the Government Mortgage Help Plan does not impose such a requirement. The occupancy of the property in question may have changed by the time the new mortgage has come into force.
Home loan modifications presently available have a potential to reduce both the principal and the interest rates. Homeowners must understand this important aspect and do some homework to assess whether they are eligible. Those who procrastinate will lose a wonderful opportunity the Government Mortgage Help Plan presents to bail out of a financial crisis.
About the Author
Government mortgage help plan under Government Mortgage Programs is providing the way to cut cost and monthly housing payments which avoid foreclosure and save home. Visit http://governmentmortgageprograms.com for more information.
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