Q:

How do you find out if you qualify for President Obama's mortgage refinancing plan?

A:

Quick Answer

To discover if homeowners qualify for the Home Affordable Refinance program, Bankrate states that they need to contact their specific lenders. In general, they should not have a history of late payments. Additionally, homeowners must have loans through Fannie Mae or Freddie Mac, and those who plan to take out cash or borrow more than 125 percent of the property's market value do not qualify. The program is complicated because each lender has its own rules.

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Full Answer

Homeowners who meet the qualifications as specified by Bankrate may qualify for the Home Affordable Refinance program. However, they still need to discuss the option with their lenders.

First, the homeowner's loan must be owned by Fannie Mae or Freddie Mac, which are mortgage companies that work under the government's conversatorships, as Bankrate explains. Next, the borrower needs to be an occupant of the home. The borrower may not have made a late payment that was over 30 days past due in the last 12 months. Additionally, the new mortgage can't exceed 125 percent of the property's market value. However, a second loan does not count toward that limit.

Bankrate also points out that rates vary and borrowers can't take out cash against the mortgage. The borrower needs to have a sufficient income to support the mortgage, and there is no prepayment penalty on the loan. Finally, the loan balance does not go up, which is guaranteed by the government's plan, but the interest rate is based on the market.

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