Housing Rescue Legislation: Are You Qualified?
Last month, President Bush signed a housing rescue bill, which will provide assistance to at least 500,000 distressed homeowners. The $300 billion legislation is set to be implemented starting October 1.
Among the many provisions of the legislation is the mortgage relief program that will allow troubled borrowers a chance to refinance their existing mortgages into fixed-rate, FHA-backed and more affordable mortgages.
If you are among the many homeowners who are looking forward to stopping foreclosure by availing of this program, you should probably know that there are certain requirements that you will have to meet to qualify. These are:
- You must be presently residing in the distressed home.
- Your mortgage loan should have been taken out between the period of January 2005 and June 2007.
- You should be spending a minimum of 31 percent of your total monthly income to pay for your mortgage dues.
- You must be able to prove that you can no longer meet your mortgage obligations.
- You should have no other existing loans or debts attached to your home such as a home equity loan.
- You will not be allowed to take out another loan that uses your home’s equity for at least a period of five years.
- You can only take out a loan amount that will not exceed 95 percent of the property’s current appraised value.
- Your lender will have to approve your application. This is because your lender will have to take down the original mortgage debt to 90 percent of your home’s present market value, resulting to considerable losses on their part.
If you think that you will be able to meet these requirements, then you should immediately contact your mortgage servicer or any FHA-certified lender and ask for their assistance. Check out the website of the US Department of Housing and Urban Development for more details.
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