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 modification of mortgage programs to help protect your most valuable asset, your home.
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:
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:
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 home modification loan, 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 for a modification of mortgage that have been prepared by a loan processor and submitted by the homeowner provide that best chance of a homeowner 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 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.
Interest rates for mortgages approved under the “Making Home Affordable” Program remain locked at as low as 2% for three, five or seven years, after which they rise by a percent per year until they reach the market rate of the day the loan was modified. To enable homeowners to pay for the mortgages, terms can get extended for as long as 40 years.
So if you or someone you know qualifies for government assistance in the form of a modification of mortgage, it is better to act quickly before the looming deadline of 2012. Call now to start saving thousands tomorrow!
Want to find out more about Government Modification of Mortgage, then visit Hannah Wolf’s site on how to choose the best Government Loan Modifications for your needs.