How Does President Obama’s Economic Stimulus Package Affect Your Mortgage?

The 2009 Stimulus Package was designed to help the many homeowners that have been affected by the current economic recession. As Obama’s first and controversial law passage, the Stimulus Package has seen lawmakers from both sides come together. The Package provides directed financial hardship assistance to banks and homeowners. The end result is that stimulus will be generated as individuals have more expendable income.Here are the key features of the Stimulus Package:- Refinancing, in the past, was only available to homeowners that had at least 20% equity in their homes. However, with the quick and severe drop in home prices the new Stimulus Package allows those with current mortgage values which are 105% greater than the current home value to be eligible for refinancing regardless of whether they have home equity. – As one of the first causalities of the economic downturn, homeowners with Fannie Mae and Freddie Mac have found little financial hardship relief. With the Stimulus Package, various methods of loan modifications are available with both companies.- The government has lowered the interest rate from 6.5% to 5.16%. This will provide further assistance by allowing home owners to take advantage of the lower rate when they undergo the loan modification.- Those who are at greatest risk for foreclosure can modify their loan such that their monthly payment will not exceed 31% of their gross monthly income. This will allow the homeowner to have a much greater amount of spendable income that can be used to stimulate the economy.Further information is available with the Housing and Urban Development department. Their financial serves are free of charge. Additional information can be found with your lender or the federal government’s website.