Providing Latest News & Updates about loan modification and mortgage refinance program announced by president Obama Government.
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General News
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Lenders who participate in the Home Affordable Modification Program (HAMP) use a standard formula for determining the eligibility of mortgage modification applicants for the federal scheme. Those of you considering applying for a loan workout under the Obama plan thereby need to learn the basic formula employed by lenders to approve your mortgage modification application.
Lenders who participate in the Home Affordable Modification Program (HAMP) use a standard formula for determining the eligibility of mortgage modification applicants for the federal scheme. Those of you considering applying for a loan workout under the Obama plan thereby need to learn the basic formula employed by lenders to approve your mortgage modification application. This could invariably help them to pre-qualify for the government home loan modifictaion program and increase their chances of securing an early approval for their proposal.
Typically, the Obama Loan Modification Program intends to make monthly mortgage installments more manageable for struggling households. Thereby distressed homeowners, who have either gone upside down on, or are at the risk of being delinquent on their existing home mortgages, have the unique opportunity to modify their current mortgages by lowering their monthly mortgage payments and save a lot of money in the long run. But to avail the benefits of the federal plan, it is very much imperative for a borrower to provide proof for financial hardships actually faced.
Some of the reasons that are usually accepted by the lenders are mentioned below.
- Decrease in monthly income
- Drastic changes in financial situation.
- Paucity of cash to pay for mortgage installments.
- Rise in monthly expenses
- Excessive credit card debts
Here is some crucial information about the formula employed by lenders under the Home Affordable Modification Plan is as follows.
- Check out if your current mortgage payments are more than 31%-38% of your gross monthly income.
- Determine the new target payment that needs to equal to 31% of your gross monthly income.
- Modify the terms of your mortgage loan to meet the target payment either by reducing the mortgage rates to as low as 2%, extending the duration of the loan to as long as 40 years or by forgiving a part of the principal loan balance.
- Carry out a verification of the financial statement furnished by you along with the application to find out if the information meets the debt ratio requirements and target payment calculations outlined by the Obama mortgage modification guidelines.
In case you do not qualify for a modification of your mortgage loan, you could be offered a bad credit mortgage refinance loan under the Home Affordable Refinance Program (HARP).
Nevertheless, to enhance your chances of getting an approval, you need to thoroughly understand the process of determining your target payment as well as debt ratio and then fine tune your financial statement by making necessary changes in your budgets prior to sending your proposal to your lender. An expert guidance is therefore essential when you are applying for a loan modification of your mortgages under the federal program. To get more information on loan modifications, it is thereby recommended to utilize the professional loan modification online services offered by reliable and reputed service providers such as LoansStore.
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