President Obama wants to help millions of responsible homeowners save hundreds of dollars each month by refinancing their mortgages.
Today, home interest rates are at historic lows—on average, below 4 percent. The average homeowner could save $3,000 a year by refinancing at today’s low rates, but far too many borrowers are locked out of a chance to do so. Complicated application processes and eligibility requirements, costly appraisals, and the fact that many homeowners owe more on their mortgage than the value of their home make refinancing all but impossible for millions of Americans.
What is President Obama’s plan to help homeowners?
President Obama’s plan is simple: make it easier for millions of responsible homeowners to refinance, even if they are underwater, regardless of who owns their mortgage. The President’s proposal would establish a quick and hassle-free process for homeowners who are current on their mortgage payments and want to refinance—no more tax forms, and no more appraisals—just a lower interest rate, and lower payments each month.
What about underwater homeowners?
When the housing bubble burst, home values dropped, and millions of homeowners who did the right and responsible thing—shopped for a home, secured a mortgage, and made their payments on time each month—were left with houses worth less than they paid for them and mortgages worth more than their homes. Today, many of these homeowners are locked out of refinancing because they are underwater.
President Obama’s proposal is specifically designed to reach underwater homeowners, and no borrower would be locked out of refinancing because they owe the bank more than the value of their home. In fact, underwater homeowners can choose to refinance into a loan that will help them rebuild equity more quickly.
How does refinancing help the economy?
Millions of homeowners who refinance could see hundreds of dollars in savings each month, but that money does more than just help individual families. Those homeowners will have more money to pay bills, more money to spend in shops and restaurants in their communities, or more money to save for college or new car. In turn, this spending—made possible by refinancing—will benefit our entire economy, and help spur the growth we need.
Where’s my “refi”?
President Obama’s refinancing proposal requires Congress to act, and until they do, millions of families will be prevented from refinancing and saving hundreds of dollars each month.