subject: Where To Search For Bad Credit Mortgage Refinancing? [print this page] If you falling behind on your monthly payments you may be qualify for loan modification so as to make your monthly mortgage payment more affordable. Millions of home owners who current are facing difficulty in making their payments and many of homeowners have already missed one or more payments might get eligible. There are some government preferences available for mortgage loan modification program, as a reduced mortgage payment can save a home from foreclosure proceedings, however be careful of foreclosure support scams. The U.S. government has few mortgage aid programs which would assist homeowners stay in their homes and prevent foreclosures. With certain conditions the mortgage server could be consent through the Feds to present one such plan for eligible homeowners. If the person owning the assets doesnt meet the criteria, there may be other legal alternatives available.
Federal Mortgage Loan Modification Program
If a homeowner cant make the monthly mortgage payment because of an accepted financial hardship, he or she may get eligible for the Home Affordable Modification Program (HAMP). If Fannie May or Freddie Mac has provided a property mortgage, the mortgage lender is mandated with the federal government to adjust loans to get the homeowners eligible. Even though a home loan isnt guaranteed by Fannie May or Freddie Mac, few mortgage lender have volunteered to facilitate those that qualify.
Rules and Guidelines for HAMP Loan Modification
With HAMP, the mortgage server has to modify the loan to an interest rate as low as 2%* per year and a term of 30 years. The lender is not obliged to go below 2% and isnt required to extend the loan past 30 years. The homeowner(s) monthly gross income must be greater than 31% of the modified loans entirety monthly payments including property tax and insurance. The mortgage server isnt mandated to reduce the principle amount.
The following steps will help the homeowner figure out if they qualify for the federal loan modification program or HAMP.
1.Utilize a mortgage calculator to figure the monthly payment on a 2%, 30 year fixed loan on the present principal balance.
2.Include applicable assets taxes and homeowners insurance to the monthly payments.
3.Part the monthly payment into 31%.
4.The amount of the homeowner(s) monthly gross earnings (not take home) must be greater than this amount.
As an instance, if the monthly payment is reduced to $1,000 (by property taxes and insurance added) with a 2% loan, the homeowner monthly gross earnings have to be above $3,225. If the monthly total earning is higher, the lender may choose to add to the interest rate above 2%.
Alternatives for Homeowners unable to Qualify for HAMP
Lending institutions would generally do whats in their best interest or what the law consents. If a homeowner does not qualify for HAMP, the mortgage server would frequently take a course of action thats in their best interest. If they feel its financially advantageous to foreclose on the property in its place of reducing the principle or expand the loan past 30 years, they would probably foreclose on the property. Prior to getting in to federal loan modification plan looking for the advice of an attorney, which specializes in foreclosure proceedings, may be the only alternative that could save a home from foreclosure. Beware of anyone that asks the homeowner to pay a fee upfront to modify a loan.
