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Following the credit downgrade by the S&P, a well-known credit rating agency, it has been surprisingly seen that the mortgage rates in the US are at their historic lows. During such an economic condition, Obama and his administration is trying their best to spur the number of refinance mortgage applications in order to reduce the number of ‘underwater‘ homeowners who owe an amount that is much more than what their house is worth. Recent researches are of the opinion that the Federal Housing Finance Agency has thought of revisiting the 2 year-old Home Affordable Refinance Program (HARP) in order to check if some more homeowners qualify under this program and repay their mortgage loans on time.

In addition to the positive thoughts of the Federal Housing Finance Agency, Obama also plans to remove all the barriers in the HARP at Freddie Mac and Fannie Mae. Under the HARP, the federal housing agencies will now agree to back and support low rate mortgage loans for qualified borrowers and help them repay mortgage loans on their houses.

What is the mega-mortgage refinance plan that is coming on the way?

The President, Barack Obama said that he and his administration are certainly going to take some steps that will enable all the underwater homeowners repay their mortgage loans and avoid a foreclosure. They will also help the homeowners refinance their mortgage loans at an interest rate that is as low as 4%. This step can put $2000 in a family’s pocket in a particular year and give a lift to the sluggish economy.

The FHFA will also be considering the obstacles to refinancing mortgages that can’t qualify due to the LTV above 125%. However, with this new big refinance plan, Obama will also provide borrowers in high LTV loans who have got a financial history of making the monthly mortgage payments on time. Apart from these, the restrictions that used to require borrowers to be at least 25% underwater and a credit score above 780 are also to be eliminated.

Are you ready to refinance your delinquent home mortgage loan?

Deciding to refinance your home is a big decision and this should be taken with utmost care so that you don’t land up in a mess. Here are some considerations that you need to make when you go for a refinance.

* Make the exact comparison: When you check out the prevalent mortgage refinance rates, make sure you compare the annual percentage rate or the APR of the loans. Examine the true cost of the loans and compare with the costs that you’re paying on your present loan so that you can determine whether or not you can save by refinancing.

* Get an appraisal: It’s always smart to get your home appraised before applying for a mortgage refinance. It’s not worth wasting time and energy on a property that is not even worth your anticipations.

* Shop around: Getting multiple quotes from multiple lenders is always a smart decision that you must take before settling the deal with a particular mortgage loan. Shopping around can save you hundreds and thousands of dollars on the loan.

* Decide to stay on in your house: If you’re planning to sell off your home soon after refinancing your home loan, this is a surefire way to lose your hard-earned dollars. Plan to stay on for a while and calculate the numbers to assess your break-even point.

Therefore, if you’re in the market for a refinance mortgage, make sure you’re aware and well-equipped with the recent changes within the housing and mortgage industry. Take informed decision and save your home off the chopping block.