The New Low Credit Score Loans

As part of his campaign to revive the ailing U.S. economy and help the people hold on to their homes and survive the current financial crisis, President Barack Obama has made available several billion dollars to help homeowners refinance their mortgage loans under the 2009 American Recovery and Reinvestment ACT. Currently, there are no strict credit score limits set on these bad credit score loans, so even if you have a low score you just might be able to qualify. The Home Affordable Refinance program will allow homeowners who are current on their mortgages to refinance their loan in order to get more affordable monthly payments. The loan has to have been originated on or before January 1, 2009, be secured by a government institution such as Freddie Mac or Fannie Mae. You should not have been late in payment more than once in the last twelve months, and this delay should be no longer than 30 days. Delinquencies such as 90 days or 160 days will not be allowed. If your loan is less than twelve months old, you must not have missed a single payment on your loan. If you owe more than your property is worth, the program allows you to borrow up to as much as 105% of the market value of your property. Proof of regular income will be required, as you will have to show that you can make the mortgage payments. If you are already behind on your mortgage payments, there is the Home Affordable Modification program, which allows delinquent mortgage payers to hold on to their homes and avoid foreclosure. The borrower must be the owner-occupant of the property being mortgaged, and the loan amount should not exceed $729,750 (single family home). To qualify, you must be experiencing hardship, such as inability to pay due to higher interest rates, loss of income, or job loss. You'll be asked to sign an affidavit of hardship explaining the circumstances which caused you to default on your mortgage. If you have several mortgages on your property, the loan will be valid for your first mortgage only. Borrowers under the Home Affordable Modification low credit score loan will be placed on a trial period of three months to see if they can afford the monthly payments. The loan servicer will work with the borrower to make the payments within reach. These low credit score loans provide a great opportunity for people with very low FICO scores to get access to funding which they otherwise would not qualify for. The Home Affordable Refinance is open until June 10, 2010, while the Home Affordable Modification program will be open until December 31, 2012. Borrowers must have completed and finalized their low credit score loan transactions by these dates. To find out if you qualify for any of these programs, talk to your lender. As this is a voluntary program and while it gives lenders incentives to participate, they may opt not to. For more information you can log on to the government's website for this program, MakingHomeAffordable.gov. Check out our website for more information on low credit score loans and how to improve your credit. You'll find everything you need to know to raise your credit score.

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