The help for homeowners in the form of modification of mortgage is being talked about around the nation in recent days. You probably know someone who is having trouble paying their monthly mortgage bill. It could even be you that is having the problems. 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 modification of mortgage programs to help protect your most valuable asset, your home.
The Making Home Affordable modification of mortgage program has four programs under its umbrella to help struggling homeowners: the Affordable Home Modification Program, the second lien Modification Program (2MP), the Affordable Housing Refinancing program and the Affordable Housing Foreclosure Options Program. If you are looking for a modification of mortgage, it is important to remember and understand the following.
You need to qualify for government help. The government is willing to help responsible homeowners receive a modification of mortgage loan, as long as they meet the government-set criteria.
The Making Home Affordable Program, can help any homeowner who meets the following guidelines to obtain a modification of mortgage:
1. Ownership of a one- to four-unit home
2. Mortgage is either owned or guaranteed by Fannie Mae or Freddie Mac
3. Mortgage is not more than 125% of their home value
4. Monthly mortgage payments are more than 31% of their monthly income (this includes principle, interest, property taxes, homeowners insurance and HOA fees)
5. The principal balance is no more than $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 usually about a quarter of the cost of an attorney, so it will save money. Beware of companies that ask for money upfront. Thoroughly research any home modification loan companies before making a purchase.
The government pays on its loan modifications. If you wonder how the home modification loans works it is as simple as ABC. The government subsidizes the loans, paying the rest through taxes. The banks participating in the modification of mortgage program are eligible for incentives issued by the government, while having to reduce the total amount of mortgage payments up to 38 percent of monthly income. Homeowners who are under the program reduce their monthly mortgage payments to no more than 31 percent of their monthly income.
The interest rates of mortgages approved in the framework of Making Affordable Home Program remain at 2% for three, five or seven years, after which the increase in percent per year is one percent until the interest rate reaches the market rate of the day the loan was modified. To enable homeowners to pay modified mortgages, home modification loans may be extended to 40 years.
Learn more about Government Loan Modification Programs. Stop by Hannah Wolf’s site where you can find out all about Government Modification of Mortgage and what it can do for you.