Homeowners just like you might be able to get a mortgage loan modification under Obama’s federal plan.
Most banks and lenders are ready and willing to process all applications for this program, the beauty of which is its aggressive nature when it comes to loan negotiations and powerful incentives to motivate the lender to approve applications. Know all there is to know about this plan before you start calling or writing your bank so you will maximize your chances of approval.
$75 billion has been put aside for this program, an amount that will hopefully help almost 5 million homeowners in the United States. This article lists some important and helpful tips that will increase your chances of getting approved for a lower monthly mortgage payment.
This new plan was created for the purpose of qualifying as many homeowners as possible. The guidelines for approval are very clear-cut. The secret is preparing properly so your application is considered and possibly approved. Here are the basic qualifications:
* You must have negotiated your mortgage before 2009
* You loan must be for $729,750 or less (some plans have a higher limit)
* You must live in your home
* Your monthly payments must be over 31% of your income (including all taxes, insurance or dues)
* This must be your first mortgage
If you meet these requirements, you have a very good chance of being approved under Obama’s new loan modification plan. Lending institutions are not required to participate in this program, but most are.
There is a very high incentive payment for each loan modification that is approved. Homeowners who make their payments on time will get a $1,000/year payment, applied directly to their mortgage principal, for up to five years.
Interested homeowners must complete an application and prove their income. A financial hardship letter is also a required part of the package as is a statement of all your current expenses.
How you fill out your application has a lot of influence in getting a modification. It is vital you complete it well so work carefully, slowly, asking questions if needed and be very thorough.
Qualifying homeowners will have their new mortgage payments reduced to just 31% of their income. The interest rate may be reduced to as little as 2% and the term of the loan can be extended to 40 years. Some principal might be deferred.
The federal terms are one of the most aggressive mortgage loan modification options for homeowners today. These terms were created to give homeowners a manageable monthly payment during this time of economic crisis. If you want to apply for this plan, you need to complete your loan modification applications correctly.
To improve your plans of being approved, read the forms carefully, ask questions of you need to know something not matter how small. This is a second chance for homeowners who are trying to avoid foreclosure. Being well prepared can make the difference between approval or