Many people today are struggling with their home mortgages. In fact, the foreclosure rate is at an all time high and the end doesn't look as if it is in sight yet. If you are having trouble making your monthly house payment, then you may benefit from the loan modification program.
President Obama and Congress has set aside $75 billion to help between 7 and 9 million homeowners who have a home payment that has become out of their reach. The program will target two different sets of circumstances. The first group that will be helped are those who are still current but who are struggling each month to make their payment. The second group of homeowners are those who are now behind on their mortgage.
Although this is a voluntary program, the Federal Government is providing incentives for both the banks and the at-risk homeowner to participate in the program. Each bank will have a set of guidelines it must follow. The aim of the program is to refinance and bring current those people who are having a rough time because of the economy or other financial hardship.
If you believe that you are a likely candidate for this program, here are a few guidelines to help you get started.
* You must be able to prove and show your income.
* You will be asked for documentation of your financial hardship.
* The loan must have originated after January 1, 2009.
* There are no loan cost fees associated with the program.
* If you have a second mortgage, that may apply as well.
* Your home must be your primary residence.
* Your house payment needs to be at least 31% of your gross monthly income.
* Your total loan amount must be under $729,750.00.
If you decide to accept a home loan modification, you will also be eligible for some special incentives. If you are current on your new loan for one year, the federal government will offer you $1,000.00 towards your principle. This offer is good for four more years. This money will be helpful as you get your finances back on track.
If you fall into one of the two categories of homeowners as mentioned above, then you need to find out more about the how the loan modification program works. This is a one of the smartest financial moves you can make.
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