Many Americans are having difficulty paying their mortgages and/or are contemplating foreclosure. Many are not sure what their options are. They've heard about the Affordability and Stability plan but they do not know how exactly it is going to help them. Many Americans are also skeptical about people in the real estate and lending areas of the US markets and are not sure who to trust. Since the hot topic of the hour is the economy and real estate markets, I would like to introduce myself to you. My name is Barbara Chamizo, I am a local realtor with Century 21 Award. My goal is to provide you with insightful news and information regarding real estate and financial solutions pertaining to home ownership.
So let's talk about the Homeowner Affordability and Stability plan. What does it mean in a "nutshell," to homeowners across America? There are many tax incentives for Americans some of the highlights are, according to the US News website published on February 19, 2009:
- Allow 4 million to 5 million homeowners to refinance their mortgages
- Establish a $75 billion fund to reduce homeowners' monthly mortgage payments
- Give Fannie Mae and Freddie Mac a $50 billion increase in allowable mortgage-backed securities
- First-time homebuyers who purchase their homes before Dec. 1 will be eligible for an $8,000 tax credit (Associated Press, February 16, 2009.)
Refinancing The first part of the plan will allow homeowners to refinance their loans even though they don't have 20% equity in their home. However, these homeowners must have original loans that are conforming and guaranteed by Freddie Mac and Fannie Mae. Additionally, the Treasury Department is going to increase its funding commitment to these organizations which will provide lower interest rates for consumers.
Mortgage Relief The second part of the initiative is to help homeowners who are underwater in their mortgages. The idea is to help reduce the monthly payment so it doesn't exceed the 38% debt to income ratio. The government is expected to come up with some clear and concise guidelines within the next few weeks. Stay tuned for next month's newsletter.
Tax Credit Let's not forget the first time homebuyer tax credit of $8,000. First time homebuyers who purchase a home between January 1st and November 20, 2009 will qualify for the credit as long has the homebuyer has not owned a home in the past three years. The plan also stipulates that the first time homebuyer must live at the residence for three years.
Call for Action So what does this mean for American homeowners in trouble with their mortgages who are underwater because of fallen home values? I am optimistic this plan will provide new opportunities for Americans to stay in their home. This also provides a great opportunity for first time homebuyers with tax and low interest rate incentives. If you find yourself in one of these situations and would like additional information please don't hesitate to call me. I can help you with a free no obligation, cost free real estate house call.
Century 21 Award