Know If You Qualify For Obama Loan Modification Plan
Obama loan modification plan was introduced by federal government of the United States to help financially troubled homeowners who were unable to make their mortgage payments because of economic recession. Also decline in housing market values has made it difficult to refinance their homes with conventional methods. However, to qualify for the federal loan modification program, you need to meet few requirements.
Because of current economic downturn, the number of people facing problems in paying their monthly mortgage payments increased largely. Hence, Obama administration introduced a special stimulus plan called Obama loan modification plan, to help all those financially struggling homeowners to make their home affordable. This new plan offers home modification loan at low rate of interest which fits well within the borrower’s monthly budget, and is for all those who cannot avail usual refinance plan because of drop in their home values. There are few qualifying rules laid by Obama administration which every individual who is interested in applying for this program needs to satisfy.
In order to qualify with Obama loan modification program you need to meet with following set of laws:
- Your current mortgage loan must be Fannie Mae or Freddie Mac insured.
- The home for which you are applying for refinance loan must be your primary residence. It cannot be any investment or commercial property.
- MHA (making home affordable) plan offers homeowners with two different choices; first one is to refinance their mortgage. And their 2nd option is they can modify their current mortgage plan. All those who are not late in their mortgage payments and amount owed by them is less than 105% of principal balance can take advantage of this plan.
- If you fail to get qualified for conventional mortgage loan modification agenda, you can avail MHA program by paying your monthly payments on time. Even those debtors who are late on their mortgage payments can be eligible for loan modification, only if they want to refinance their primary residence and have monthly installments more than 31% of their gross monthly income.
- The main aim of loan modification program is to assist those home owners who cannot refinance their current mortgage loan due to decline in home values. This new plan alters the loan terms and brings it below 31 % of the total monthly income. In initial phase loan modification attorneys in us reduces the interest rate up to 3% to get debt ratio about 39%. Even after reducing interest rate to 3% if debt ratio doesn’t get reduced to 39% few other modifications can be made, like time period for loan payment can be prolonged up to 40 years, according the financial circumstances and debts owed by debtor.
If you are trouble home owner and seeking for Loan Modification Help it is very necessary to start it in right manner so that laws don’t hamper you from getting qualified to loan modification program. Solve your further queries regarding how to get loan modification by free service provided by online service provider LoansStore.
Processing your request, Please wait....
