About the "Making Home Affordable" Package
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 …show more content…
Much of the money was earmarked for cash incentives to banks and lending institutions, which are required to pass it along to homeowners by modifying their loan terms. The result is that there are many more choices when buying a new home, or refinancing an existing one.
Will Making Home Affordable Work for You?
If you were previously considering a home mortgage refinance but found that it didn't make sense financially, or was impossible due to restrictions placed by the lender, then it may be the perfect time to revisit this option.
According to the package, homeowners are eligible to modify the terms of their mortgage so that the monthly payment equals 31% or less of their gross income. Because of economic woes and the failing real estate market, many Americans are now paying up to 50% of their monthly income for their home alone.
Mortgage lenders are required to adhere to a set of guidelines outlined as part of the legislation in the Making Home Affordable package. In some instances they are able to offer a very low 2% interest rate. The money they are losing will be covered by the government's cash incentives as part of this