Making Home Affordable: Ways to Stop a Foreclosure On Your Home
Nowadays, foreclosure has been gaining public attention as many financially troubled homeowners are likely to experience the risks of losing their precious homes to their respective lenders. Here’s a list of most common ways that homeowners do to overcome their foreclosure problems: Find the exact cost that can stop foreclosure and pay it – If you’re able to find out the total cost of several missed loan repayments plus the interest; sum them up and pay them off by making a one-shot payment. Hence, you need to be extremely determined to tackle this foreclosure issue and be certain about the total outstanding payment that you need to make. It’s not worth losing your home to foreclosure due to a small back payment.
If you answered YES to all of these questions, you may be eligible for the Modification Initiative. Am I eligible if I missed some mortgage payments? Yes. If you missed two or more mortgage payments and answered “yes” to the Modification Initiative requirements above, you may be eligible for a loan modification. Do I need to be behind on my mortgage payments to be eligible for a Home Affordable Modification? No. Responsible borrowers who are struggling to remain current on their Long Island mortgage payments are eligible if they are at risk of imminent default. Examples of being “at risk” include facing a significant increase in your mortgage payment or a reduction in your income. Contact me to discuss your specific situation. I have a second mortgage. Am I still eligible?
Yes, but only the first mortgage is eligible for a modification.
It is always a good idea to set aside some time to get to know about the industry, and what it can offer you as a consumer. You can always refer to the Better Business Bureau to find out if your prospective loan modification specialist is observing the guidelines and procedures for your particular location as well as get another feedback and references. Get the opinion of other companies aside from your lender on where to find the appropriate loan modification specialist to handle your mortgage. There are well known and reliable companies that will provide you with assistance as well as point out the alternatives you that have. The Making Home Affordable Program as well as the Federal Program for Homeowner’s Assistance is some example of such companies. Check with your local state for any government-run programs designed to aid people like you. It always pays to be wise with your monetary and credit concerns.
What happens after five years? Beginning in year six, the rate may increase no more than one percentage point per year until it reaches the “rate cap” in your modification agreement, which is basically the market interest rate on the date the modification is finalized.
That means your rate can never be higher than the market rate on the day your loan is modified. This is great news because rates are currently at historic lows… and you can lock in now. How low can my interest rate go? Treasury is providing incentives to your investor to write the interest down as low as 2%, if necessary to get to a payment that you can afford based on your income.
What happens if that is not enough to get to an affordable payment? If a 2% interest rate is not enough to bring your payment down to 31% of your gross monthly income, your servicer can extend your payment term–for example, give you a 40-year loan rather than a 30-year. If that is still not sufficient your servicer will defer repayment on a portion of the amount you owe until a later time. This is called a principal forbearance. A portion of the debt could also be forgiven. This is optional on the part of the investor. There is no requirement for principal forgiveness.
Look for HAMP for loan modifications or refinance – If you’re seeking for stop foreclosure assistance from the Government, you can try applying for a loan modification or refinance plan under the Obama’s administration – commonly known as Making Home Affordable Program (HAMP), for affordable monthly repayment., for affordable monthly repayment. You need to start making inquiries to them to see whether you’re eligible for such program.
Learn more about Obama Mortgage Relief Plan Qualifications.
