Homeowners who are struggling with loss of income, increased expenses or some other financial hardship may be able to get help with a government rescue plan paid for with $75 billion in stimulus money. President Obama’s Home Affordability plan is available for borrowers who can no longer afford their mortgage and are facing the possibility of default or late payments. Learn how the loan modification process works and just what it takes to qualify for this federal assistance program.
Would a 2% interest rate on your home loan help you to be able to afford your mortgage? When a borrower qualifies for Obama’s program, one of the standard methods of reaching an affordable monthly payment is to reduce the interest rate to as low as 2%, as well as possibly extending the loan term out to 40 years. In some cases where the home has lost a significant amount of value, some of the principal balance may be deferred or even forgiven.
The loan modification process has been streamlined under Obama’s plan so that a qualified homeowner can get results quickly. The first step is to gather all of your financial information together so that you will be able to complete your forms correctly. You will need your paycheck stubs, bank statements, tax returns and your monthly bills and expenses. It is critical to be prepared before you call you bank-the loss mitigation counselors do not want to sit on the phone while you rummage through your files! They are swamped with desperate homeowners, and if you can present your financial situation quickly, concisely and accurately you will get your answer much faster.
The loan modification process under Obama’s plan has standard approval guidelines-this means that if you can meet the criteria, you have a good chance of getting your interest rate reduced to as low as 2%. The trick is to know what those standard guidelines are and then use that information to fine tune your own application. There is a 4 step formula that lenders have been told to use under the Obama plan. Learn this formula, make any necessary adjustments to your application, then contact your lender with confidence.