Financial Resource

Attempting to sift through mortgage loan modification on your own loan is bad enough. Try to find a private time to sit in silence and thing about your financial goals.  Is keeping your home one of them?  If so, the administration has created Obama loan modification programs to help. With the help of good loan modification companies you can get your existing mortgage modified to a better interest rate!

Being calm throughout the process is paramount and I want to prepare you with how loan modification companies estimate your maximum payment and how they can restructure your loan to get you to that maximum payment and everything clear about this process. Please know that even if you do not qualify you can find out why.  Beginning 1/01/10 the loan modification companies have to tell you why you were not approved. This gives you the opportunity to straighten out these areas and reapply.

The banks have a formula to calculate loan modification rates. You present your complete (gross) income before taxes.  The lender will use a calculation of 31% that will be the basis of your new restructured payment.  This consists of the mortgage payment for your first loan only, property taxes, homeowners insurance, and Homeowners Association dues.  Be ready to present all of these figures.  Your new payment cannot go over 31% of your gross income.

If you want to determine this for yourself you need to know: What is your gross income (before taxes)? Multiply the gross (not net) by 31% this is what they call 31% DTI (Debt to Income Ratio).

This 31% this is the maximum total payment that HAMP will allow- if your current payment is already lower than this figure your modification under HAMP will be denied.

Next, determine what the monthly Homeowners insurance, Property Taxes, HOA fees? Subtract this from the above 31% figure.  The balance is highest your first Mortgage Payment can reach.

The mortgage company can reorganize the conditions of your loan such as interest rate to minimum 2%, term of the loan, defer principal to the end of the loan interest free or in very rare cases principal forgiveness – in this order to get you to the maximum payment amount due monthly.

You have to be aware of your new payment due dates, losing your home matters to you more than anyone else so you need to stay abreast and request postponements and verify that they have been done.

Being calm is a good suggestion, find a positive outlook to not give up and make the calls, take the action, and do the work if you are going get a mortgage refinance loan yourself.  Be a self-promoter. This means being organized and going the extra mile even if it takes a couple of denials to get an approval. Know your finances inside and out, make the necessary cutbacks, and make a commitment to dedicate 100 percent of your efforts.  This way, you can have a successful mortgage refinance loan.

President Obama’s Loan Modification Program is very hopeful for the homeowners who are at risk to contact their money lender and ask them to consider modification of a home loan. Under this plan, your bank evaluates your submission and decides whether you are eligible for a home loan modification or not.

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