| Your Options Under Obama's Federal Loan Modification Plan |
Help is available to homeowners having trouble making their mortgage payments under the Home Affordable Plan initiated by President Obama. Depending on your qualifications, two potential options may be available to you: (1) refinancing; (2) loan modification.
Refinancing is the better option is the price of your home has decreased in this soft real estate market. The terms of the loan can be extended by up to 15-30 years while maintaining the existing interest rate. The program requirements are:
1. Loan delinquency of less than 30 days during the prior 12 months
2. Refinancing is available only for your first mortgage on your primary residence
3. Loan is insured under Fannie Mae or Freddie Mac
4. Home value is more than 105% of what you owe
5. Proven ability to afford the modified mortgage payments
The refinancing program is available to you if you meet the above-referenced requirements. This program benefits those with fixed rate loans because you could assume a higher monthly payment if your terms are for a low interest rate or if you have an interest-only loan.
The loan modification plan is available to those homeowners with or without Fannie Mae or Freddie Mac and have a different set of requirements as follows:
1. The loan modification is for your first mortgage on your primary residence
2. The limit on your loan must be less than $729,750
3. The loan being modified must have closed before January 1, 2009
4. The monthly loan payment exceeds 31% of your gross monthly income
5. The modified mortgage payments are affordable within your ability
It is better to seek loan modification before your loan has gone into default. The lender will want to understand the causes of your hardship and work out a plan that will fit your current situation. It is in the best interest of both you and the bank if you are able to modify your payment terms.
As part of your application for either of the two options mentioned in this article, you will need to complete an application, write a hardship letter, and pull together all pertinent documentation for the banks review. Complete all the steps carefully and with attention to detail so that you can be approved for loan modification and maintain homeownership.
For more information about Obamas federal loan modification program, visit the #1 loans modification resource on the net: http://HomeLoanModifications101.com
Article Source: UnArchived Articles
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