Can I make my mortgage affordable?

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NEW YORK (CNNMoney.com) -- We now know the details of President Obama's plan to stabilize the housing market and keep millions of Americans in their homes.

The Homeowner Affordability and Stability Plan has two initiatives designed to help struggling homeowners.

Let's look at the first initiative of the Homeowner Affordability and Stability Plan. It's designed to help underwater homeowners refinance to a fixed rate loan.

To qualify, borrowers must be current on their mortgage payments. Their loans must be held by Fannie Mae or Freddie Mac. To find out if your mortgage qualifies, call your lender. You must have sufficient income to make the new payments. There will be no principal reduction, but you could save money over the life of the loan.

The second initiative is designed to help lower monthly payments for homeowners at risk of losing their home by modifying the loans they have.

Borrowers can be behind on their mortgage payments and still qualify. But the mortgage must be for your primary residence. In addition, the mortgage bill should currently come to more than 31% of your monthly gross income.

These mortgage modifications work by reducing interest rates. While not a fixed rate, the new interest rate is in place for five years. After that, the rate begins resetting higher. And for the first time, the issue of second mortgages is addressed. This program would eliminate secondary mortgage debt for borrowers.

Get your paperwork in order now.

You'll need proof of income -- including pay stubs; your most recent income tax return; any second mortgage documents; any information pertaining to your credit card payments and information on other loans, including student loans and car loans.

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