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Obama Loan Modification Programs As Compared To Obama Mortgage Refinance Stimulus

28th February 2011

The Obama loan modification programs seek to alleviate the financial hardships faced by struggling homeowners while allowing them to stay in their homes. Once qualified for the plans that are backed by a $75 billion stimulus package, borrowers can get access to much lower mortgage rates and hence reduce their monthly mortgage payments considerably. However, there are two types of plans under the federal scheme.
1. Making Home Affordable Program or HAMP
2. Home Affordable Refinance Program or HARP
Both Obama loan modification and Obama mortgage refinance plan options have different eligibility criteria.

To qualify for a loan modification under HAMP.
1. The existing mortgage loan should have been sanctioned prior to 1st January, 2009.
2. The mortgage to be modified needs to be the primary residence of the applicant.
3. The guidelines make it mandatory for applicants to have front-end debt-to-income ratio (DTI) of 31% which includes principal, interest, taxes and insurance.
4. The applicant must have a back-end debt-to-income ratio that is less than 55% of the total monthly debt payable which includes credit card debts, auto loan payments, student loans, etc.
5. The value of the current home mortgage should be less than $ 729,750 for a single unit.
The entire process of loan modification is cost free. But if the value of your home has decreased and you are into significant debts, it could be hard for you to qualify for a federal loan modification.

On the contrary, to be eligible for a FHA Refinance program under the federal plan, a borrower needs to meet the following requirements.

To be eligible for a mortgage refinance under HARP.
1. The home to be refinanced should be the primary residence of the applicant.
2. Existing home mortgage should be owned or insured by Freddie Mac or Fannie Mae.
3. Applicants should have maintained regularity in paying the monthly mortgage installments for the past 12 months.
4. The value of the first mortgage should not be more than 105% of the price of the home.
5. The applicant must provide proof of regular monthly income.
However, the applicant is required to pay mortgage refinancing fees even if there are no pre-payment penalties involved. Additionally, a mortgage refinance loan has a fixed rate of interest for 15 to 20 years.

The best way to get an expert guidance to find out what kind of a federal option you could qualify for is to avail loan modification and Mortgage refinance quote offered by reputed services providers like This could be critical for you to have a thorough understanding of the federal loan modification and mortgage refinance process. In addition, if you do not qualify for either a loan modification or mortgage refinance under the federal scheme, you could even be helped to explore various no credit check mortgage refinance options that suit your financial needs.

Exploring Plans For Obama Loan Modification And Mortgage Refinance Online

Category : business/financial-services/mortgages/
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