You’ve heard the news. In fact, you may be living the news. Since the summer of 2008, almost everybody who owns a home has seen its value dramatically decrease. Some have lost more than half of the value of their home and because of that, the nation and the world has seen the overall economy seriously degrade.

Remember when you purchased your home? Maybe it was your first home or maybe you were a seasoned pro and the allure of walking through the doors of your new dwelling no longer excited you. Regardless, you undoubtedly knew that your home was an investment and in 5 to 10 years along with some improvements, you could stand to make some money on your purchase.

Unless you’re an economist, an investor, or other financial professional, there’s a good chance that you didn’t know that home prices were rising much too fast. You didn’t know that just around the corner a blowout would happen.

The Recent Economic Meltdown

In 2008 the blowout occurred. The economy had a severe meltdown and home prices dropped rapidly. When the dust cleared, you went to bed in a home that had lost half of its value or more. You were paying a mortgage that, if you paid the entire 30 years, you would most likely still lose money.

To compound the problem, you may be one of the 9.5% of Americans who were unemployed. You were a victim of the bad economy. You were considering sending your house keys to the mortgage lender and walking away.

The Economic Stimulus Plan

On March 4th, President Obama came to the rescue. As part of the stimulus plan, Obama made it possible for people to refinance their home loan at a 4.5% interest rate. This was done in the hopes of keeping people from walking away from their mortgages.

This interest rate has limitations. It has to be a refinance or a first home purpose. This keeps the real estate investors from using this rate to buy homes as investments. With more than a 3 trillion dollar price tag, the Obama administration wants to minimize the cost as much as possible.

Additionally, as part of the stimulus package, Obama was hoping that with lower mortgage payments, consumers would use their extra money to make purchases. This would help stimulate the economy. While that hasn’t happened on a large scale, it has helped to keep people in their homes.

If you are one of those who has lost your job or is considering walking away from your home, talk to your lender. This program, and others, may be able to help you make your home more affordable.

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