Have you been affected by the recent economic downturn and tried to get a home mortgage refinance only to find you did not qualify? You might feel the need to reduce your monthly payments because you have been laid off from your job or maybe you you’ve tried to sell your house but could not. If so, you are just one of the many citizens President Obama targeted when developing the plan called “Making Home Affordable”.

What is “Making Home Affordable”?

The basics of the “Making Home Affordable” plan rest on allowing mortgage lenders to loosen restrictions on the options for a home mortgage refinance. Lenders are also required to modify the terms of an existing loan in certain situations. Anyone who has been adversely affected financially due to the economy may be eligible to benefit from this plan.

The president’s goal in enacting this piece of legislation was to ultimately provide a positive effect on the real estate market. He is also hoping that the millions of citizens negatively affected by the recessionary economy will find relief, and be able to avoid foreclosure.

As you may have seen in recent news reports, Making Home Affordable was a major part of the $75 billion bailout plan Congress approved. Mortgage lenders received the bulk of cash incentives in order to cover modifications to current loans and also to approve new mortgages. For homeowners or buyers, this has opened up many opportunities and increased competition from lenders for their business.

Will Making Home Affordable Work for You?

Anyone who felt the need to seriously consider a home mortgage refinance due to financial difficulties or the real estate market prior to now will be happy to know this package may be just the answer they were waiting for.

Making Home Affordable states that eligible homeowners can work with their mortgage company to lower payments to 31% or less of their reduced monthly income. This will affect quite a few Americans who are currently paying anywhere upwards of 40% or more on their mortgage each month.

Lending institutions must adhere to the guidelines of this stimulus package by offering a 2% rate on existing loans, thereby reducing the percentage of income being paid out on a mortgage. Their costs are covered by the government’s cash incentives.

Eligible homeowners must meet certain criteria to receive these great home mortgage refinance terms. First, they must be current on their loan, and stayed current on all payments in the last 12 months with no payment past due for more than 30 days. If they are seeking the 2% interest rate, they will have to sign a letter of Financial Hardship which outlines the reason for their loss of income. Another way to get the 2% rate is by proving that the value of the real estate mortgaged has fallen by at least 15% in value. And any homeowners who used Fannie Mae or Freddie Mac as their mortgage lender are automatically qualified.

Now that the Making Home Affordable package has been enacted, the possibility of a home mortgage refinance that saves you thousands of dollars annually may just be within your reach. Consider your options and get started saving money today.