Obama's 2009 Stimulus Package For Homeowners -Helping You Gain Control Of Your Mortgage_47200

For the first time since the Depression, homeowners all over the country are dealing with a crumbling economy which is having devastating effects on home ownership. Foreclosure and bankruptcy filings are at an all time high, as property values continue to decline. Many people find themselves owing more than their property is worth. This combined with a climbing unemployment rate has Americans struggling to stay afloat.

President Obama is tackling this problem by providing relief in the form of a Stimulus package directed at homeowners to help them gain control of their mortgages. The assistance is available in various forms, which homeowners can access through their lenders. They can also find information on the internet by performing searches using key words like "loan modification" or "Stimulus Package for homeowners", or by going directly to the lender's website.

Many modifications lower the existing interest rate for a period of time, which in turn lowers the monthly payments. The lender will require certain documentation to determine your financial situation and figure out what you can afford to pay based on your current income. By lowering the payments, people are able to keep their homes and have disposable income to help the economy recuperate.

Wondering how this new Stimulus will affect your mortgage? Here are some key points for you:

Previously, you needed to have at least 20% equity; however that has changed with the new plan. As home values have decreased so rapidly, this requirement was eliminated, allowing more people access to modifying.

Freddie Mac and Fannie Mae loans, both existing and modified, are able to take part in the new program.

Mortgage payments cap at 31% of your gross monthly income.

Interest rates have continued to decrease and have dropped from 6.5% to an average of 5.16% which will maximize your savings when you modify.

For those of you with an ARM (adjustable rate mortgage), you will have the option to convert it to a fixed interest rate, and with rates this low, it's worth modifying.

You can also extend your loan for a period of 20-30 years on average which would also result in lowering your monthly payment.