Jul 4, 2009
Refinance with 125% Loan-to-Value - Will it Help You?
Last week, President Obama announced a major change to the Making Home Affordable Refinance Plan. In the initial plan that came out in March, those with a 105% loan-to-value could refinance; not necessarily at the extremely low mortgage rates, but they could refinance. Now that the housing market does not seem to be getting much better, the refinance plan has been extended to 125% loan-to-value. You could be have 25% negative equity in your home and still have the opportunity to refinance. This has never been the case in the history of the United States housing market.
Now that we know that the refinance plan has been extended is it now time for you to go for that refinance. I have many friends and family members who did not want to refinance because they knew their appraisal value would come to way too low for them to even be considered. Now that the Obama Refinance plan has been changed to 125% LTV, I would imagine many of them are going to seek out refinancing at these historically low mortgage rates. Will you take advantage of this unprecedented time as well?
Unfortunately this plan is still to little and too late to help most of those affected by this market, mostly because values have declined to nearly half their original value. I for one still don’t qualify.