| As our great nation is in an economic recession, the | | | | their existing mortgage on time. Borrowers who have |
| Obama administration has a plan in effect called | | | | become late on their mortgage loan bills can get loan |
| Making Home Affordable for mortgage rate | | | | modifications. As long as it is their primary residence |
| modification for millions of homeowners. The objective | | | | they own and have a monthly payment that is greater |
| of the plan is to provide assistance to homeowners | | | | than 31% of their gross monthly earnings. |
| mortgage and lower the amount of foreclosure | | | | The purpose of the loan modification program is for |
| notices. | | | | homeowners at-risk and regulates the terms of their |
| What Are the requirements for mortgage loan | | | | home loans as a result they will get under 32% of their |
| modification? | | | | gross monthly income. The initial phase is for lenders to |
| It just may surprise you that the homeowner must | | | | reduce the interest rate to around 3% in order to get a |
| have a Fannie Mae insured mortgage loan. If that | | | | 39% debt to income ratio. And if the interest rate is at |
| passes the test, you have to live in a owner occupied | | | | 3% and still doesn't get them to 39% debt ratio, then |
| home to refinance or alter the terms of your home | | | | additional modifications can be done. Additionally, the |
| loan from the initiative. | | | | lender can increase the loan term up to 40 years, and |
| The guidelines of MHA offer homeowners two | | | | then they can even start to reduce the principal |
| different choices and their first one is to refinance their | | | | balance of the loan. |
| mortgage. Their other option is to modify their existing | | | | So, you do have some options and solutions at your |
| mortgage. People can use this plan if they have not | | | | fingertips. It is up to you put them in motion by making |
| become late on their home loan payments and owe | | | | contact with your lender or letting a professional |
| less than 105% of the principal balance. | | | | company handle it. It never hurts to try when it can |
| If they are not eligible for the standard home loan | | | | onyl benefit you. |
| refinance, they can use the MHA Plan while paying | | | | |