Understanding the loan modification steps can mean the difference between being approved and getting rejected. In this short article, I’ll reveal the key steps necessary in understanding pre-qualification so after reading it you’ll be able to confidently move forward with an application.
Step 1: Calculate Debt/Income Ratio
Before you can qualify for a HAMP loan, you need to prove that your monthly mortgage repayment does not fall below 31% of your gross monthly income. This is important because the HAMP program was created to help out families with a heavy debt burden, i.e. a monthly commitment in excess of 31% of gross monthly income.
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With the dip in the US economy, it was almost certain that the housing market would be seriously impacted as well. Sales of new homes have just about come to a standstill. Not to mention the growing number of people that owned a home but are now unable to afford their mortgages due to the other effects the nation’s economy has had on people.
Some have outright lost their jobs and have been unable to find new employment. Others have found new jobs, but they do not pay as much as their old ones. This does not take into consideration the increase in the cost of living or the chances that some other financially devastating thing happens in your life such as a major illness or the loss of a loved one. Just one of these things is bad news but the combination of things has hit homeowners hard. If you are in this tight financial situation and you are seriously having difficulties keeping up with your mortgage, then it’s time for you to consider a loan modification with Obama’s 2% loan modification program. It is called a 2% program because this is the low rate the modified loan can be fixed at.
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Everyone has been talking about the President’s Mortgage Loan Modification Program. It was introduced in February 2009, and over a million people have received a reworked mortgage and avoided foreclosure. Before the program is discontinued in 2012, it is estimated that 3-4 million people will be assisted.
If you are in default on your mortgage or even just struggling, you may qualify for a loan modification through this program. You might live in a duplex, but you are behind on the mortgage. Would that disqualify you from approval?
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