Last week, the fixed mortgage rates fell again as the Federal Reserve planned to buy the mortgage backed securities. It was noted that rates for 30-year fixed home loan had declined to 4.80 %. On the other hand, the 15-year fixed rate was unchanged at 4.48%.

In an announcement on March 18th, the Federal Reserve said that it would purchase as much as $750 billion of additional mortgage-backed securities from Fannie Mae and Freddie Mac. This declaration resulted in record low rates for fixed mortgages. As the mortgage interest rates are falling to a record low, it will stimulate the buying of homes.

In the last week, due to lower rates, the number of mortgage applications in the U.S. rose. Moreover, refinancing applications also increased due to the falling of the mortgage rates. Thus, the lowering of mortgage rates is giving a positive boost to the real estate market helping it to come out of the present crisis.

This is a common question which homeowners, who are upside down on their mortgage, ask in the forums. Recently, the Obama administration has come up with 2 types of programs which would make mortgage affordable around 9 million homeowners: refinancing and loan modification.

Special refinancing program: This is a special program which will help people to refinance their mortgage into cheaper loans. It is also known as Home Affordable Refinance. To qualify for this program, your loan must be backed by Fannie Mae or Freddie Mac. Moreover, the first mortgage on your home cannot exceed 105% of the current value of the property.

Loan-modification program: The loan modification program is designed for those who do not qualify for the special refinancing program. The modification must take place by December 31st, 2012. Lenders can reduce the interest rate of the borrowers to as low as 2%. They can even extend the loan term to 40 years. As the lenders modify the loan terms of the borrowers, the government will provide them with incentives for this.

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If you are upside down on your mortgage and don’t know how to handle the situation, then the Home Affordable Refinance can help your cause. This is a new program introduced by the Obama Government to assist millions of homeowners who can’t refinance their property due to loss of equity.

Home Affordable Refinance Program in brief:
It is a program which lets you to refinance your existing mortgage into a fixed rate loan for 30 years or 15 years even though you owe more on your mortgage than your home is worth. While you refinance the mortgage, you can take advantage of the current rates prevailing in the market.

Eligibility for Home Affordable Refinance:

• You must be current on their mortgage payments. Also, your mortgage should have been originated before January 1, 2009.
• The 1st mortgage on your home should not exceed 105% of the present market value of the property.
• Your loan should be backed by Fannie Mae or Freddie Mac. Homeowners with jumbo loans do not qualify for this program.
• You can take advantage of this program only for your primary residence.
• You should have sufficient income to pay off the loan according to the new plan given by the lender.

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