FHA loan modifications or the Federal Housing Administration Home Affordable Modification Program aims to lower down the interest rate on a homeowner’s monthly installment payments. This program comes under the Making Home affordable program of the US and it was specifically designed to help consumers not to lose their property due to bankruptcy by refinancing their mortgage before foreclosure.

Going into bankruptcy is one of the most terrifying thing that can happen to anyone especially those with properties that can be taken away from them. Fortunately, there are solutions to these problems such as the FHA loan modifications and the Obama Federal loan modification.

Before applying for any loan modification program you have to know that there are many factors that will determine if you can qualify for any program. Here are some

For the FHA modification, your loan should have been granted by the lender before January 1, 2009. If it was taken after that date, then are not qualified. Another thing is that the home you will refinance should be listed as your primary residence and that you are currently living in it; if not, you might not be a candidate for the program.

The status of your payment history is also a big factor; if you are a good debtor and have been making on time payments in full monthly amounts, then your image will look good to your lender and you will have a good chance of being granted a refinancing loan. Your credit score should also good or if not you should be willing to pay for a much higher interest rate. Deciding over this immediately will save you from loosing too much time.

You should also make sure that all your papers including your income tax return for the previous year and all your mortgage documentations are in order. Once you have all this sorted and contact your lender and see if you qualify.

Obama Federal Loan Modification is the most effective way to get home refinancing loan nowadays. This program reaches to people who would want to save their homes and to encourage lenders to grant loans to homeowners, they will be paid $1,000 for each modification and additional $1,000 yearly payouts up to 3 years as long as the debtor pays his monthly dues. For the borrowers, they can get knocked off fees of $1,000 from their principal loan each year up to 5 years if they will pay their dues on time. These incentives will be given after the third month of the modifications.

This is another program that homeowners can avail in refinancing their existing mortgage. This program aims to save homeowners from filling bankruptcy by helping them make affordable monthly payments. If you are close to foreclosure, this is the best modification program for you.