Loan Modification Program Now Covers Second Mortgages

The Obama Administration’s loan modification program is now expanded to cover homeowners with second mortgages. According to sources, not allowing banks to modify second mortgages was preventing many from issuing new loans to consumers.

A second mortgage loan is often referred to as a home equity loan, and in many cases, a home equity loan is easier to obtain than a regular mortgage. In the past, home equity loans were much easier to get than a line of credit; causing many consumers to choose this route when facing rising debt. The problem with the original loan modification program was that it did not take second loans into account, and banks did not want to refinance one part of the outstanding debt and not the second part.

Under the new loan modification program, the federal government will pay mortgage lenders $500 for granting a modification to the homeowner’s second loan, then provide $250 per year for three years if the modification is successful.

The expanded modification program will likely help reduce the monthly payment on second loans. An estimated 50 percent of people who attempted to get debt relief took out home equity loans, meaning as many as 1.5 million homeowners could benefit from modifying their second mortgage.

See more:
Mortgage Prevention Plan Now Helps Homeowners with 2nd Mortgage
US Govt Unveils New Mortgage Modification Incentives

$6,000 Home Purchase Grant for Utah New Home Buyers

The state of Utah recently passed a law that allows a $6,000 home purchase grant for a total of 1,600 buyers who purchase new homes in Utah. The new law was passed on March 12, 2009; the program officially began on March 16, and to date, 555 home buyers have been approved at a cost of $3.3 million. When all 1,600 grants are awarded, the state will have provided a total of $9.6 million in grant funds.

The $6,000 home purchase grant, also known as the Home Run Program, is being overseen by the Utah Housing Corp.

Intended on stimulating new home sales in Utah, homebuyers who purchase a single-family house are eligible to receive $6,000. The Home Run Program grant does not have to be paid back to the state. Funding for the project is provided by the Housing Relief Restricted Special Revenue Fund.

$6,000 Home Purchase Grant FAQs

How do I apply?

Home buyers apply for the program using an approved lender.

Is there an income level limit?

Yes. Single tax payers are limited to an annual income of $75,000. Married couples are limited to $150,000.

What types of homes qualify?

Newly constructed single-family houses, condominiums, twin homes, planned unit developments, townhomes, and manufactured homes that are permanently fixed to a foundation. A Certificate of Occupancy or a final inspection provided by an applicable municipality is required.

What You Should Know When Buying A New Home

Buying a new home can be a very exciting experience, but often requires a lot of time and effort to ensure that all of the buyer’s wants and needs are met. Below you will find four steps that every home buyer should read before taking on the daunting task.

Make a list of your needs

Don’t get distracted by a beautifully decorated home. If the home does not match your needs, do not consider the home. If you have large dogs that need a large backyard, don’t settle on anything less. Otherwise, shortly after moving in, you’ll find yourself having certain regrets.

Discover your builder first

80% of all homebuyers start their home search online. You should do the same. When searching for a new home in the area in which you wish to live, start by discovering the builder. What do previous buyers have to say about the builder? Has the Better Business Bureau received numerous complaints about the builder? When selecting home builders first, you are essentially eliminating multiple homes, hence narrowing your search.

Get pre-approval

The majority of buyers prefer not to get approved for a loan until after they have found their perfect home. When getting pre-approved for a home loan, you will know exactly how much home you can afford. This will help you in your new home search by eliminating the homes outside of your price range.

Get a real estate agent

A good real estate agent will be a great resource for you throughout your home search. Agents know their market, they know whether a home is accurately priced or overpriced. Real estate agents have home buying tools at their disposal. Agents can use their connections with listing services and home builders to help refine your search and save you valuable time.