The Obama administration introduced the new Obama mortgage loan modification plans on March 4th 2009. This can be considered a huge lifeline and helping hand for those of you struggling to make your mortgage repayments. It is expected that the mortgage loan modification program will aid up to 9 million American homeowners. In this article i would like to answer some of the questions you may have about Obama’s scheme. In order to qualify for mortgage loan modification, you should have taken your loan out prior to January 1st 2009 and still be living in the property. Your home should also be worth less than $729,750.
The mortgage loan modification plans are intended to help borrowers in financial difficulty. Although the majority of applicants have either been in arrears or facing foreclosure, this is not absolutely necessary to be approved. Many lenders would prefer that people approach them if they believe they are in financial hardship, this of course may be prior to you falling into arrears.
Your mortgage payments should be adjusted to form no more than 31% of your monthly income. So if you believe that you are paying more than this on a monthly basis, you have a great chance of qualifying for mortgage loan modification. Usually your lender will drop the interest rate on your loan to as low as 2%. They may decide to extend the term of your loan to an absolute maximum of 40 years. They may even offer you a combination of these 2 things to ensure your payment falls within the 31% threshold.
If a homeowners debts, including the monthly home loan, are more than 51% of a homeowners monthly income, they will need to agree to go to free government provided Credit counseling. You can find out more about these free credit counseling sessions by visiting your local HUD office. Homes which have declined in value more than 15% will be eligible to use the benefits from the Obama plan, including 2% refinancing or mortgage modification. A lot of homes have dropped in value as a result of the bad economy, and the housing market, which is even worse.
Are you currently facing foreclosure? Although the mortgage loan modification plans should be considered an alternative to foreclosure, they can and should keep the roof over your head. The government would like to slow down the rate of foreclosures and would like to provide as much assistance to homeowners as possible. Your mortgage interest rate can be decreased to as little as 2% and the term of the loan can be extended to 40 years. Just these two simple actions could more than half your current mortgage repayments and save you from impending foreclosure!
The next page contains some of the most shocking and yet enlightening information about the Mortgage Loan Modification program and will explain exactly how you can save yourself these huge upfront fees!
Learn more about Obama Mortgage Relief Plan Qualifications.
