Do I qualify? What you need to know....

As many of us know the Long Beach Real Estate scene has taken a beating the past couple of year... People are in trouble. These are good people who may have been sterred by bad advise from their mortgage professional and/or agent. We have all been hearing over the past few weeks a lot about the new bailout plans for homeowners.

Below you will find an article I found in the Wall Street Journal that helps shed some lite on the confusing mess....

In recent weeks, the government, both on a federal and state level, have announced new tax credits for home buyers, housing stabilizations plans, and the like. Due to the various requirements for each program, some home buyers and/or homeowners may be confused about whether or not they qualify.

MAKING SENSE OF THE STORY FOR CONSUMERS

· The goal of the “Homeowner Affordability and Stability Plan” is to help homeowners remain in their homes. For a loan to qualify for modifications, lenders would need to bring the monthly mortgage payment down to 38 percent of a borrower’s monthly income. The government would then match further reductions until the debt-to-income ratio is 31 percent. The deductions could come in the form of a lower interest rate or reduced principal. For homeowners who pay their mortgage on time, the write down could be as much as $1,000 of the loan each year, for five years.

· The government will help homeowners who owe between 80 percent and 105 percent of their home’s value, and have been unable to qualify for refinancing because their home has negative equity. This could help as many as 14.8 million homeowners. However, only mortgages owned by Fannie Mae or Freddie Mac are eligible, which excludes many homes in high-cost areas, such as California.

· As with all refinances, it is important that homeowners have their mortgage paperwork, proof of current income, and assets readily available. A representative with the Mortgage Bankers’ Association advises homeowners to wait until March 4 to contact their mortgage lender or servicer, when more details and guidelines are due.

· The recently signed “American Recovery and Reinvestment Act of 2009” increases the first-time home-buyer credit from $7,500 to $8,000, and removes the requirement that the credit be paid back if the buyer stays in the home for at least three years. It also extends the expiration date for the credit from July 1 to Dec. 1, 2009. Home buyers must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009, to be eligible for the $8,000 credit.

To read the full story, please click here

Jeff Hall
Long Beach Home Solutions Inc.

jeff@jeffhallrealtor.com

www.jeffhallrealtor.com