President Obama and Treasury Secretary Geithner are spending $75 billion to help homeowners stay in their homes. Is there something in there for you?
The quickest answer can be found by looking at how much you earn, not how much you owe. If your total monthly home payments (interest, principal and taxes) are greater than 31% of your monthly, pre-tax income you may qualify. Even if your home is worth less today than what you owe, you may be able to refinance.
What if your payments aren’t higher than 31% of your income? The Administration has also proposed a way to help homeowners who aren’t at risk of default refinance, even if they owe more than what their house is worth. Normally it’s difficult to refinance if you owe more than 80% of what your home is worth. But under new rules you may be able to refinance up to 105% of the home’s value. Not all mortgages will be eligible. They have to be owned or insured by Fannie Mae, Freddie Mac or one of the other government-backed programs. High-value, “jumbo” loans may not meet the test.
The new loans apply to homeowners who are current in their payments. The complete eligibility guidelines will be available March 4th and I'll be here to disseminate them!
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