The government has funded a mortgage modification program that encourages banks to rewrite existing mortgages for homeowners who have experienced financial hardship and are struggling with their house payment.
Maybe you qualify! Is your house payment becoming more and more difficult with every passing month? If you qualify, you could get a lower house payment by applying for this program.
The target payment is below 31% of a homeowner's gross monthly income.
This payment amount also includes property taxes, insurance, and homeowner dues.
The mortgage is actually rewritten, not just refinanced.
The banks receive a financial bonus for doing these modifications.
The government puts several tools at their disposal to achieve the desired house payment.
They can lower interest rates, lengthen loan terms, reduce principal, and waive late fees.
The really great thing is that you receive a financial incentive, too! For every year that you are current on your house payment, you will receive $1000.
per year, up to 5 years! That's a sizeable portion of principal you can chew off of your mortgage.
Hopefully, the new monthly payment will be affordable and be much easier for you to avoid being late.
The first thing you must ascertain is if your lender is on the approved lender list for the federal program.
Then you must be sure your loan is backed by Fannie Mae or Freddie Mac.
Was the loan signed on or before January 1, 2009? And, the loan amount can't be over $729,750.
You need to understand, also, that only loans on primary residences are eligible.
The financial side of the application is slightly different than a standard loan application.
You must establish financial hardship which is a decreased income or increased expenses that you don't have control over.
At the same time, you must establish that you have sufficient means to pay the new mortgage payment in the long-term.