Refinancing: Foreclosure Prevention Plan

Contrary to popular belief, the President’s foreclosure prevention plan isn’t just designed to help “losers.” Indeed, in addition to loan modification for those who had an affordable mortgage to begin with, there is help in there for those of use who have stood helplessly by while home values dropped. In order to take advantage of some of the amazing refinancing rates available right now, under the new plan, here is what is required:

• Less than 20% equity in your home.
• Owe no more than 5% of what your home is worth.
• Be making your mortgage payments on time.
• Have good credit.
• Have a loan serviced through Fannie Mae or Freddie Mac.
• Want a fixed rate for a 15 or 30 year loan.

I could qualify to refinance my home. I have less than 20% equity (we’ve only been in the house for a year and a half), I have good credit, I didn’t take on more than I could handle and I’ve been paying consistently. Indeed, the President’s plan may reward me for being somewhat responsible. I could save thousands of dollars by refinancing to a lower rate — and maybe save more by going to a 15 year loan.

There are possibilities out there for those who have made good financial decisions. You just need to know where to look. For this program, you should start by asking your mortgage lender.

image source: sxc.hu