If you’ve watched the news lately, then you’ve probably heard about President Obama’s “Making Home Affordable” plans.   But  do you know what  they are?   If you are a struggling homeowner, do you know if you may qualify?   Read on…education is power!

There are two main components to the Making  Home Affordable Plans: Refinance and Loan Modification.  

Refinance:    This  option is for homeowners who are current on their mortgage, but  have been unable to  refinance, by conventional means,  due to a decrease in their home’s value, for instance.   Many homeowners who purchased a home 5-7 years ago may have gotten a great interest rate at the time.   That rate, however, is possibly 2-3% higher than today’s rate.    Do you realize that on a $200,000 mortgage, a decrease of even 2% on your interest rate will reduce your mortgage payment by over $250 per month?

Are you eligible for a Home Affordable Refinance?

• Are you the owner of a one to four unit home?
• Are you current on your mortgage payments?
• Do you have a loan owned or guaranteed by Fannie Mae or Freddie Mac?   Find out here:

                                        www.fanniemae.com/loanlookup  or 1-800-7FANNIE

                                        www.freddiemac.com/mymortgage  or 1-800-FREDDIE

If you can answer “yes” to all three of the above questions,  you may qualify for a refinance.   Talk to your mortgage company to find out your next step.

Loan Modification:   This option  is for homeowners who are struggling to make their  payments, perhaps  due to an increase in their interest rate or decrease in their  income.

Are you eligible for a Home Affordable Loan Modification?

• Did you obtain your mortgage prior to January 1, 2009?
• Is your home your primary residence?
• Do you owe less than $729,751 on your mortgage?
• Is your payment on your first mortgage (including principal, interest, taxes, insurance and homeowners association dues, if applicable) more than 31% of your gross income?

If you answered “yes” to the above questions, you may qualify for  a Home Affordable Modification.   The goal of a modification is to reduce your mortgage payments to 31% of your gross income by either reducing your interest rate, extending your mortgage term or even forgiving a portion of the principal balance (although the last option is  up to your mortgage company’s guidelines and generally, is not offered if the modification can be accomplished by other means).  

If you think you may qualify for either program, contact your mortgage company today.  

For more information on the Making Home Affordable program, visit:   www.makinghomeaffordable.gov

To find a HUD approved housing counselor (free), visit:   http://www.hud.gov/offices/hsg/sfh/hcc/fc/  

In closing, if your situation is such that you are unable to qualify for either program, due to extreme hardship, job loss, divorce, death in the family, etc., you still have options.   You do not have to face foreclosure.   Contact a Realtor, who is well versed & experienced in short sales, to see if this may be your best option.