You don't have to take chances with your federal loan modification proposal-learn the guidelines for debt ratio and target payment under the government's workout plan. Homeowners who are either in default or at risk of default may be able to qualify for a very aggressive loan modification-the trick is to be able to complete your application forms so that your lender can verify that you meet the standard approval guidelines.
The first mortgage loan amount must be at or under $729,500. You must have taken out your loan prior to Jan 1, 2009. You must have a verifiable hardship. The property must be owner occupied. Property must be between 1 and 4 units. Next you need to know exactly how much your total PreTax (gross) income is - they will use a percentage of 31% that will be the basis of your NEW MODIFIED PAYMENT including mortgage payment for your first loan only, property taxes, homeowners insurance, and Homeowners Association dues - The total MODIFIED mortgage payment CANNOT exceed 31% of your gross income.
The federal loan modification plan is designed to offer all eligible homeowners an affordable and sustainable mortgage payment. The government wants you to stay in your home-and they will pay your lender to modify your loan using the standard terms of Home Affordable Modification. Don't hesitate to apply for this plan-after all, it is paid for with your tax dollars and you need and deserve this help.
Remember that the homeowner is providing their financial information - monthly income, monthly expenses, cash in the bank, etc. - on their application form and this is the information that is used when determining if the homeowner will qualify. The lender will use standard methods of reducing the current mortgage in order to meet a new target mortgage payment. This new payment will equal 31% of the borrowers reported gross monthly income and it includes principal, interest, taxes, insurance and any HOA dues. The first Waterfall method step to reach the target payment is to reduce the interest rate, and the rate can go down as low as 2%. If more changes are needed to reach the goal, then the loan term may be extended to 40 years. The final step is to forgive or defer some principal balance to reach the new desired target payment. This is called a Waterfall Method because they lender must follow these steps in order, as they are needed. However, if the borrowers income is too low or too high, or if the loan balance is so high that a large principal reduction would be needed, the loan modification may be denied.
Homeowners who hope to be approved need to understand how the loan modification process works and most importantly how they should complete their financial statement so that it will be acceptable. If you know ahead of time how much income you need to prove to qualify, then you will be able to make the necessary adjustments and submit an acceptable application. If you knew that just by cutting a couple of hundred dollars a month in expenses, you would fit the guidelines, then you would certainly do that, right? This is confusing for borrowers, but you can use a loan mod software program that will actually show you just how much income you need and where you may need to fine tune your figures to fit into the standard HAMP guidelines.
The first mortgage loan amount must be at or under $729,500. You must have taken out your loan prior to Jan 1, 2009. You must have a verifiable hardship. The property must be owner occupied. Property must be between 1 and 4 units. Next you need to know exactly how much your total PreTax (gross) income is - they will use a percentage of 31% that will be the basis of your NEW MODIFIED PAYMENT including mortgage payment for your first loan only, property taxes, homeowners insurance, and Homeowners Association dues - The total MODIFIED mortgage payment CANNOT exceed 31% of your gross income.
The federal loan modification plan is designed to offer all eligible homeowners an affordable and sustainable mortgage payment. The government wants you to stay in your home-and they will pay your lender to modify your loan using the standard terms of Home Affordable Modification. Don't hesitate to apply for this plan-after all, it is paid for with your tax dollars and you need and deserve this help.
Remember that the homeowner is providing their financial information - monthly income, monthly expenses, cash in the bank, etc. - on their application form and this is the information that is used when determining if the homeowner will qualify. The lender will use standard methods of reducing the current mortgage in order to meet a new target mortgage payment. This new payment will equal 31% of the borrowers reported gross monthly income and it includes principal, interest, taxes, insurance and any HOA dues. The first Waterfall method step to reach the target payment is to reduce the interest rate, and the rate can go down as low as 2%. If more changes are needed to reach the goal, then the loan term may be extended to 40 years. The final step is to forgive or defer some principal balance to reach the new desired target payment. This is called a Waterfall Method because they lender must follow these steps in order, as they are needed. However, if the borrowers income is too low or too high, or if the loan balance is so high that a large principal reduction would be needed, the loan modification may be denied.
Homeowners who hope to be approved need to understand how the loan modification process works and most importantly how they should complete their financial statement so that it will be acceptable. If you know ahead of time how much income you need to prove to qualify, then you will be able to make the necessary adjustments and submit an acceptable application. If you knew that just by cutting a couple of hundred dollars a month in expenses, you would fit the guidelines, then you would certainly do that, right? This is confusing for borrowers, but you can use a loan mod software program that will actually show you just how much income you need and where you may need to fine tune your figures to fit into the standard HAMP guidelines.
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