Home modification loans are being talked about around the nation in recent days. You probably know someone who is having trouble paying their monthly mortgage bill. That person could even be you. Homeowners in trouble can remain optimistic despite the current crisis.
To help responsible homeowners who have been affected by the economic downturn, the Obama administration has filed several government programs, such as modification of mortgage and home modification loans, to help protect your most valuable asset.
The “Making Home Affordable” Program has four modification of mortgage programs under its umbrella to help distressed homeowners: the Home
Affordable Modification Program; the Second Lien Modification Program (2MP); the Home Affordable Refinance Program; and the Home Affordable
Foreclosure Alternatives Program. All of these home modification loans are available to most distressed homeowners. If you are looking for a
modification of mortgage it is important to remember and understand the following:
It is necessary to qualify for government assistance home modification loans. The government is willing to help responsible homeowners to receive a modification of mortgage, provided they meet the criteria set by the government.
The “Making Home Affordable Program” can help any homeowner who meets the following guidelines:
1. Ownership of a being-to four-unit house
2. Mortgage owned or guaranteed by Fannie Mae or Freddie Mac
3. Mortgage not more than 125% of home value
4. Monthly mortgage payments are more than 31% of the monthly income (this includes principal, interest, property taxes, homeowners insurance and HOA fees)
5. The principal balance is only $ 729,750
Consultations with a professional loan processor can save time and money when applying for a modification of mortgage. A professional can help you prepare your application for your modification of mortgage, to present your situation as best as possible. Lenders like every file to fit into a neat little box and if the parameters cannot be met homeowners are denied outright, even if they are qualified for a modification of mortgage. Having a professional to prepare your file will help you present your situation to fit in the box and save time, money and your peace of mind.
When applying for a mortgage modification, unless you are in bankruptcy, avoid the involvement of a lawyer. Most lenders do not like working with lawyers and their participation may be detrimental to your application for a home modification loan. Applications that are prepared by a loan processing professional and submitted by the homeowner have the best chance of obtaining a beneficial modification of mortgage.
They are also generally about one fourth of the cost of an attorney, so you will also save money. Be wary of companies that ask for your money up front. Research all home modification loan companies thoroughly before making a purchase.
The government pays on its loans. If you wonder how a modification of mortgage works, it is as simple as ABC. The government subsidizes the loans, paying the rest through taxes. The banks participating in the program are eligible for incentives issued by the government, while having to reduce the total amount of mortgage payments up to 38 percent of the homeowner’s monthly income. Homeowners who are under the program only have to set aside as much as 31 percent of their monthly income for modified mortgage payments.
The interest rates of mortgages approved in the framework of Making Affordable Home Program remain closed in at only 2% for three, five or seven years, after which the increase in interest is one percent per year to reach the market rate of the day the loan was modified. To enable homeowners to pay the new monthly mortgage on their home modification loan, the loan can be extended to 40 years.
Want to find out more about Government Loan Modification Programs, then visit Hannah Wolf’s site on how to choose the best Government Modification of Mortgage for your needs.