Ask The Money Coach

By Lynnette Khalfani-Cox, The Money Coach

President Barack Obama has made no secret of the fact that he wants to bring the cost of buying and owning a home down – way down – as a way to jumpstart the economy.

Hope for first-timers and existing home owners

As part of the $885 billion economic recovery plan now being heralded by the Obama administration, new home buyers could get mortgages with interest rates as low as 4%. It’s possible the plan may even extend to existing homeowners who would be able to refinance their current mortgages, also benefiting from lower rates.

For their part, GOP lawmakers are pushing to double an existing home buyers’ tax credit to $15,000, up from the current level of $7,500. Republican leaders even want the home buyers’ tax credit to be made available to all buyers, not just first-time homeowners. (See L.A. Times piece.)

The House has already passed its version of the economic stimulus package; the Senate is currently weighing the bill. While nothing is certain, what is apparent at this point is that there is broad bipartisan support to attack the housing problem. That means real reform is likely to occur this year concerning lower mortgage rates and bigger tax credits for owning real estate.

Fannie and Freddie Extensions

Speaking of owning property, are you struggling with a mortgage you can’t afford? If your bank sold your loan to Fannie Mae or Freddie Mac, you might get some relief from these two agencies, which are the biggest holders of mortgages in the country.

Fannie and Freddie recently opted to extend until March 1^st a foreclosure moratorium on loans it holds. So if you’re behind on your house note, and your original bank or lender sold off your mortgage to Fannie or Freddie, you can breathe a sigh of relief in knowing that those agencies won’t be sending a sheriff to you door anytime soon.

As an added bonus: Fannie and Freddie have launched a new rental option plan to let qualified owner-occupants and tenants have leases so they can rent properties on a month-to-month basis after foreclosures.

Custom Search

 Lynnette Khalfani-Cox, The Money Coach is a personal finance expert, speaker, and author of numerous books on personal finance. She appears frequently as an expert commentator on television, radio and in print.