Homeowners
A significant portion of the economic stimulus plan is designed to help homeowners. Not only will it help with first time home buyers, giving them a tax credit, but it will help homeowners from losing their homes due to foreclosure.
If you are ready to own your first home, you may qualify for the new home buyer's tax credit. This is an extension of the 2009 new home buyer’s credit, but will increased to $8,000; or $2,000 quarterly that never has to be paid back. A first time home buyer is defined as someone who has not purchased a house within the last three years. The tax credit does not apply to those thinking of purchasing a second home.
There is a separate stimulus package for existing home owners that are looking for a new home. These individuals could qualify for a $6,500 credit if they have lived in their existing residence for at least 5 years and make no more than $125,000 individually or $250,000 as a couple. This salary allowance is up $50,000 from last year’s policies and as such many more Americans are able to take advantage of this stimulus.
And there is stimulus aid for home owners that are no longer able to make their monthly mortgage payments. With unemployment rates at such a high level, it is no wonder so many people can’t afford their payments and are in fear of losing their homes. On average, 38% of a family's income goes towards paying their house payment. With the new plan, that rate would be lowered to 31%.
A family with a house hold income of $50,000 will typically pay $19,000 per year toward their mortgage. Under the new plan, $15,500 would go towards the mortgage totalling $3,500 in savings.
If you are a current home owner you may want to think about a home equity loan or a line of credit, there are several options available for you, generally at a lower rate than personal loans and credit cards. With a home equity loan you borrow against the value of your home, minus any other mortgages. There are two types of home equity loans. A home equity loan that provides a fixed rate for a fixed amount of time, and a home equity loan that allows you to borrow up to a pre-approved credit limit.
Another option is to refinance your current mortgage. If you are able to refinance at a much lower rate, use the money you save to pay off other bills and use that extra money to create an emergency savings fund.
Lenders would be required to write down a mortgage principal rather than interest rates. The goal here is to help reduce the chances of default.
If a homeowner is about to file bankruptcy, they must report that information to their lender before they file for bankruptcy protection. Bankruptcy judges can modify mortgages, but only those mortgage that have been closed before the law goes into effect.
There are several mortgage assistance programs available to help you keep your home. Make sure you take advantage of the right one for you.
If you are at risk to lose your home to foreclosure or if you are interested in refinancing your mortgage at a lower rate, apply today