President Obama’s Broad Based Mortgage Refinancing Plan

President Obama’s Administration has provided details on the mortgage refinance proposal from the President’s State of the Union Address. The goal of the Administration is to help underwater homeowners take advantage of historically low refinance rates from the best mortgage lenders like Amerisave. Do you qualify? Here are the basics you need to know about President Obama’s broad based mortgage refinancing plan:

Refinancing for Most Home Loans

One of the most important aspects of President Obama’s proposal is that it will be available for most mortgage loans, regardless of whether or not Fannie Mae or Freddie Mac back the loan. Unlike HARP and HARP 2.0, this plan will be available to more homeowners, regardless of Fannie and Freddie.

Easy Credit Qualification

You will need a minimum credit score of only 580 to qualify for the broad based mortgage refinancing plan. Analysts estimate this will cover 90 percent of homeowners. The only other credit related requirement you need to be aware of is that you cannot have any missed payments for the last six months and only one during the past 12 months.

Mortgage Refinancing Limit $729,750

The President’s plan calls for mortgage refinancing by converting you to FHA backed home loans. This means as long as your home loan falls into FHA limits, you’ll qualify. How much you’ll qualify for depends on the area of the country that you’re living; however, the amounts range from $271,050 to $729,750.

Streamline Refinance For Fannie & Freddie Backed Loans

If you’re already backed by a home loan insured by Fannie Mae or Freddie Mac (most homeowners are), you’ll be able to refinance without documenting income or having an appraisal. Even though you aren’t required to document income you will be required to prove you are employed.

Lender Waived Closing Costs

President Obama’s proposal calls for lenders to waive their closing costs for homeowners electing mortgage term lengths under 20 years. According to the President, this will allow most underwater homeowners to have positive equity inside of 5 years.

During his State of the Union Address, the President pledged to have legislation regarding this plan delivered to Congress. While he didn’t give a date that Congress would have the proposed legislation, this would be the first time he has submitted a homeowner refinance proposal to Congress. Previously all of the President’s programs under HARP have been signed by Executive Order. It’s unclear how Congress will receive the President’s proposal or if it will pass the House and Senate.