| For many homeowners, paying the monthly mortgage | | | | disclosure of your financial situation with documents to |
| payment is a huge undertaking, especially for those | | | | back it up, like tax returns and paystubs. You must |
| homeowners who have a variable rate mortgage that | | | | also provide the lender with a financial hardship |
| has recently adjusted to a new, higher rate. | | | | statement or affidavit that lets them know why you |
| Fortunately, the United States government has | | | | are having trouble making your payments - job loss, |
| stepped in and created programs that allow | | | | sickness that prevents you from working, etc. Your |
| homeowners to cut their risks of losing their homes to | | | | mortgage payment must take up 31% or more of your |
| foreclosure. And while refinancing or modification of | | | | pretax income, and your new payment amount must |
| your existing mortgage is tricky, the first thing you need | | | | be less than 31% of that amount. |
| to determine is which you should do - modification or | | | | Refinancing Under This Plan |
| refinancing. | | | | For those homeowners who are eligible to refinance |
| If You Are Facing Foreclosure | | | | their existing mortgages (in lieu of mortgage |
| If you are facing foreclosure of your home mortgage, | | | | modification), there are qualifications that must be met. |
| the government has implemented programs that | | | | Refinancing can help you get out of a variable rate |
| provide an incentive for your lender to either modify or | | | | mortgage that has adjusted to a rate that is not |
| refinance the mortgage and keep you in your home. In | | | | affordable. Only those mortgages that are written by |
| this way, homeowners who do not qualify for | | | | Freddie Mac and Fannie Mae qualify for refinancing. If |
| refinancing in the traditional fashion can still find | | | | you are not sure if Freddie or Fannie have a hand in |
| assistance. This is usually the case when home values | | | | financing your mortgage, check with your lender - |
| have fallen in your area and the bank or lender does | | | | because many, many mortgages are underwritten by |
| not feel comfortable with altering your loan or | | | | these two giants in the mortgage industry, and |
| refinancing a mortgage that is underwater. | | | | chances are you do not even know it. |
| Modification Under This Plan | | | | You must also prove that you have sufficient income |
| Mortgage loan modification can help thousands of | | | | to make your mortgage payment, as determined by |
| homeowners to stay in their homes with more | | | | your income to debt ratio. Your refinanced mortgage |
| affordable monthly payments. The mortgage | | | | cannot be more than 105% of the current value of |
| modification allows your lender to rewrite the terms of | | | | your home, as determined by current market values |
| your loan to include a better interest rate (a lower | | | | for your area. Mortgages refinanced under the new |
| interest rate) and a longer term (up to forty years for | | | | plan will be written as fixed rate mortgages for fifteen |
| some borrowers). This has the effect of lowering your | | | | or thirty years. |
| payment because you are paying less interest and | | | | Why Now Is The Best Time To Modify Or Refinance |
| stretching your payments out for a greater number of | | | | Now is the best time to modify or refinance your |
| years. | | | | mortgage because of the low, low rates that you can |
| To qualify for mortgage loan modification, you must | | | | get, which will make your home cost less in the long |
| have taken out your mortgage anytime before | | | | run. While the beginning of this year saw mortgage |
| January of 2009, and you must be modifying your | | | | interest rates drop below 5%, most rates for the |
| existing mortgage on your primary residence, not on a | | | | coming months and the beginning of next year will hold |
| second home. You must owe less than $729,500 on | | | | steady right at 5%, which is a great rate no matter |
| your home, and you must be able to provide full | | | | how you look at it. |