How to Refinance Homes Under the Stimulus Plan

Refinance your home under the government stimulus plan.

The government stimulus plan includes a provision to help qualified homeowners lower their mortgage payments and keep their homes.

Instructions

1. Determine who owns your mortgage. In order to qualify for this type of refinancing, Freddie Mac or Fannie Mae, the government-backed mortgage companies, must hold your loan. Though these companies usually use bank servicers to collect your monthly payments, they possess the loan. The company where you send your mortgage payment can tell you whether it's a Freddie or Fannie loan.

2. Calculate what your home is worth (a real estate agent can provide comparable sales). Borrowers must not owe more than 105% of the value of their properties to get government-backed refinancing. For example, if your residence has a market price of $105,000 and you owe $100, 000 on your loan, you meet the regulations. However, if you owe more than $110,250, you don't.

3. Determine the date your mortgage began. Only notes that borrowers took out prior to the first day of 2009 meet the guidelines.

4. Pursue refinancing with the lender who services your note. When you call the servicer to find out the name of your mortgage holder, it will require you to provide it with paperwork to show that you qualify for the refinance. You will have to provide proof of wages via your last couple of pay stubs, previous two W2s, and you also must show a financial hardship; for example, severe illness, layoff, or death in the family. The bank will also want to know your total expenses, outstanding debts, and if the previous financial challenge is resolved so that you can make the payments on your refinanced mortgage note.

References

• Will my Mortgage now Qualify for Refinancing under Obama and FHAs Revised Home Mortgage Modification Program: Saving to Inve$t
• FinancialStability.gov: U.S. Department of the Treasury