The threat of losing your home to foreclosure is one of the scariest experiences for homeowners to think about. Yet, even the most prepared and responsible homeowner can face sudden tragedy, loss of a job, or other financial difficulties that can threaten home ownership. Fortunately, for many, a home loan modification program can help homeowner’s save their home and prevent the threat of foreclosure. It’s important, however to know the difference between legitimate home loan modification programs and scams that will try to take you money at the expense of losing your home. There are steps that you can take that will help reduce the fear and stress associated with your mortgage and help ensure that you keep your home.
Your first step is to contact your lender and determine what type of mortgage you have, what your payment schedule is like and if your payments will increase due to being an adjustable rate mortgage or hybrid adjustable rate mortgage. If your mortgage payments are scheduled to increase then speak to your lender about a home loan modification program that will allow you to switch to a fixed rate mortgage.
The United States government has instituted a number of different programs to help homeowners stay in their homes and prevent foreclosure. The best way to do this is to use programs made available through the Departments of the Treasury and Housing and Urban Development (HUD). Every state has a local HUD office that is essentially your starting point for finding local resources that are available to help make your home more affordable. There are programs available but you must make the effort to find them and do what you can to stay in your home. If your mortgage payments have become too high and you fear you can’t pay them, you must explore all options including a home loan modification program. These programs can effectively lower your payments and your rates.
There are often monetary limits set on the amount of a mortgage that will qualify for various programs. If your mortgage payments are greater than what your local HUD program is offering assistance for, thereby making you eligible then speak to your lender directly and see what they are willing to do. There are more than 100 mortgage companies nationwide that are working with the U.S. government to help reduce your monthly mortgage payments and save your home.
If you have any questions or concerns regarding your current mortgage payments, contact your mortgage lender and ask if they participate in any making home affordable programs. These programs may cover those who are unemployed as well. Some of the programs include the home affordable foreclosure alternatives program, the second lien modification program (2MP), the home affordable modification program (HAMP), the Unemployment Program, Principal Reduction Alternative and the Affordable Foreclosure Alternatives Program. Other programs include the Home Affordable Modification Program for Federal Housing Administration Loans (FHA-HAMP); Second Lien Modification Program for Federal Housing Administration Loans (FHA-2LP) and the Home Affordable Modification Program for Rural Development Loans (RD-HAMP).
Each program has its own eligibility such as how long you’ve lived in the home and whether or not the home is your primary residence. The amount of the mortgage must be higher than your monthly gross income (the amount you make before you pay your taxes). Most times you will have to show that you are in a current state of financial hardship or difficulty and that you will possibly lose your home due to the inability to continue making payments. You must also prove that should you be granted a home loan modification program you can sufficiently and easily make the payments each month. These programs do not want to lower your payments only to see homeowners lose their homes anyway. Also,, though credit may not be a huge factor in eligibility, your criminal past is. Those who have felony convictions within the past ten years including theft, fraud, forgery, tax evasion or any type of criminal act pertaining to real estate law may be denied.
If you are in danger of losing your home, contact your mortgage company and ask if they participate in any home loan modification programs and if so, begin your application immediately.