| The secret to understanding the loan modification | | | | excess monthly cashflow shows that you can afford |
| guidelines for HAMP completely rests in how you | | | | a mortgage payment of 31% of the gross income. |
| submit your income and expenses. A few bucks in | | | | They can't lower you payments to something unless |
| either direction on your groceries or electric bill could | | | | you can show the ability to pay that much. |
| mean the difference between cutting your mortgage | | | | NPV Test (Net Present Value) - This test is basically |
| payment in half, and being outright denied. I have | | | | used to determine how a HAMP loan modification |
| gathered a few of the most important secrets to | | | | effects the lenders bottom line. It calculates many |
| follow when trying to navigate the HAMP loan | | | | factors including the value of the home, your re-default |
| modification approval process. | | | | rate, and many others to determine whether it's worth |
| HAMP Income to Debt Ratio Guidelines - The magic | | | | accepting government cash and establishing a HAMP |
| number to understand here is 31%. Under HAMP | | | | loan modification on your loan. If a loan fails the NPV |
| guidelines the lender is supposed to reduce your | | | | test, the lender may automatically consider it for other |
| mortgage payments to 31% of your gross income. If | | | | in-house and investor modification options. Many times |
| your income to debt ratio is below 31% and nothing | | | | a couple minor adjustments to the income or |
| can be adjusted, HAMP will not be an option worth | | | | expenses can result in passing the NPV test after |
| spending long periods of time trying to qualify for. If you | | | | failing previously. |
| come in anywhere between 32% - 70% it will be | | | | There are many guidelines that determine whether or |
| worth exploring HAMP further and requesting a | | | | not your loan qualifies for a HAMP loan modification. |
| review. | | | | The good news is that you can usually make |
| Excess Monthly Cashflow Guidelines - This number is | | | | adjustments or changes to your monthly budget in |
| the simple calculation of monthly income minus monthly | | | | order to present a better case for the lender to |
| expenses. The result will be either a surplus or deficit. | | | | modify your loan. It can take a bit of patience and |
| The general rule with most lenders is not to let either a | | | | persistence but the end result can be the piece of |
| surplus or deficit exceed 10% of the total gross | | | | mind that you will be in your home for a long time to |
| monthly income. Easier said, make sure that your | | | | come. |