My New Blog

Less than 20% Equity in your home?

In the current scenario, families who own less than 20% Equity in their home have a very difficult time to take advantage of the current lowest interest rates.  The new proposal would allow home owners who have Fannie Mae and Freddie Mac guaranteed loans to get a new loan up to 105% of their existing home appraised value.  This is available to credit worthy home owners only and the refinanced loan to be a 15 year or 30 year fixed mortgage.  The loan shouldn't contain any clause for prepayment penalty.  Full details of the plan is still awaited and will be published at a future date when available.

On the Verge of default?

Obama's plan also contains provisions to help struggling individual families and neighborhoods to reduce foreclosures and stabilize home prices.  The goal of the program is to "reduce the amount homeowners owe per month to sustainable levels." Homeowners who are current on their loans but are struggling can apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.

Tax Credit for First Time Home Buyers

According to the plan, first-time homebuyers who purchase home from beginning of the year until the end of 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home as tax credit.  It's important to understand that the tax credit offered as a dollar to dollar tax deduction rather than a reduction in a tax liability.  Better still, the incentive is refundable, which means you can receive a check for the credit even if you have little income tax liability.  This tax credit is available only for the purchase of a primary residence either detached single family home or an attached home.  The First time home buyer is defined for the purpose as a home buyer who doesn't own their home in the past three years.  For more detailed information contact: raj@valleysaversmortgage.com