subject: Few Vital Guidelines To Get Approved For The Obama Loan Modification Plan [print this page] You may determine your eligibility to get benefited from the Home Affordable Modification Program (HAMP) to reduce the burden of existing level of mortgage payments. By qualifying for the HAMP, you can be able to get an access to lower mortgage interest rates and affordable loan terms. Drastic reduction in your monthly payments can save a lot of money for you in the long run. However, the biggest hurdle in the modification procedure is to get approved for the Obama loan modification plan by knowing its requirements. This makes it compulsory for you to have a complete knowledge on the subject.
Obama loan modification program is designed to assist struggling homeowners who are at risk of default and foreclosure due to unaffordable mortgage payments. Loan modification service offered under the HAMP thus intends to stabilize the current upheaval in real estate market of the country. The program requires borrowers to meet certain eligibility criteria which are as follow:
1.The current mortgage to be modified should be the first mortgage.
2.Mortgage should have commenced on or before 1 January, 2009.
3.Borrower must be using his property as his primary residence. Properties being used for investment are not eligible for modification under the HAMP.
4.Pending dues of current mortgage should not be above $729,750.
5.The program is scheduled to end on 31 December, 2013.
6.Latest pay stubs, latest tax returns and an affidavit of financial hardship must be submitted by an applicant.
Once applicant and mortgage both qualify for receiving loan modification service under the HAMP, a net present value test is conducted. It determines whether the estimated net present value of mortgage with modification is greater than the estimated net present value of mortgage without modification.
Lenders might reduce interest rates as low as 2%. Modification process aims at reaching a debt-to-income ratio of 31%. Lenders can also reduce monthly payments on mortgage. The duration of repaying the mortgage can be prolonged up to 40 years. In some cases, principal reduction is also possible to reach debt-to-income ratio of 31%. To encourage lender"s participation into mortgage modification, the federal government also provides incentives to them.
You can also apply for the traditional mortgage modification programs by finding a reputable loan modification company. Your search should not end here. You need expert"s guidance to know how to meet standards of lenders to get your mortgage modified with affordable terms. If you have an expert to assist you, the entire process of submitting application and modification approval will be easier, faster and less rigorous. With you, an expert will plan your budget in such a way that will allow you to make timely mortgage payments till the loan is paid fully. Mortgage modification may not be a favorable option for some struggling homeowners; here they can get rid of unmanageable mortgage debts with Obama"s Home Affordable Refinance Program.
