How Can The Housing Bill Help You?
To the average homeowner or soon to be homeowner, all of the talk about the housing bills in Congress can be confusing. At the end of July, the bill passed The House, and would mean an additional $300 billion worth of housing rescue, but what does this actually mean to the average consumer?
The goal of the housing bill is to help homeowners who are currently struggling to avoid foreclosure, a very real, life changing event that not only affects people today, but well into the future as their credit score is destroyed. In order to provide this help to the consumer the bill will provide additional support to Fannie Mae and Freddie Mac, two mammoths in the lending industry.
At Risk? Refinance?
What the bill will do is to provide people who are in the early stages of foreclosure to refinance their homes into new, more affordable mortgages. First, I would like to be sure you know that anyone can refinance their loans, at any time, assuming they qualify to do so. FHA also provides refinance options. In other words, if you are on the brink, contact FHA lenders to get your loan in place with low risk.
The bill will provide people with the opportunity get out of their unaffordable mortgage and into new mortgages, with a low cost fixed rate. The loans will be insured by the FHA, Federal Housing Administration, giving the borrower much more backing to qualify for a lower rate loan.
According to estimates provided by the Congressional Budget Office, there are about 400,000 people who have some $68 billion worth of loans currently who would benefit from this housing bill’s passage. That is a great number, but there are likely to be many more people who are struggling. The good news is that the housing bill does allow for many more to participate in the program, as many as one to two million borrowers.
The Questions Answered
Who is able to get help through this housing bill?
You will have to live in your homes and your mortgage must have been issued between January of 2005 and June of 2007 in order to qualify. You also need to be spending at least 31 percent of your gross income each month on your mortgage.
Do you have to be in default?
Homeowners who have an existing mortgage or those who are in default will qualify, but you must will have to prove that you are not just defaulting on your mortgage to get a lower payment out of the deal. You also have to prove you can’t keep paying on your mortgage for some reason.
Do Other Loans Hurt?
In addition to the above qualifications, you will also need to pay off or eliminate any other type of debt you have on your home. This includes any home equity lines of credit you may have or equity loans. Once you do this, you will be qualified to obtain an FHA backed loan for your home, again giving you the lowest interest rate possible. You will not be able to get a home equity line of credit or loan on the home for the next five years. At that time, you will need approval from FHA to get the loan, and it cannot be more than 95 percent of the home’s appraised value.
How do I get this help?
To get help from this program, contact an FHA approved lender. FHA will work through various lenders to offer this program to those who qualify. In any situation, you should seek out the help of FHA loans, as even outside this program, many people can get additional help.
