Homeowners are feeling the effects of the economic downturn. What seemed like an affordable home has now become a huge burden for some. Many working people have had to take a pay cut or worse. With the record number of job losses, some homeowners have lost their only source of income. In turn, they have had to take lower-paying jobs just to survive. If these homeowners used to manage only to find that now they can’t make their mortgage payment, what help is out there for them?
The Obama administration is spending $75 billion in aid to help millions of homeowners. Obama’s federal loan modification program helps make home ownership more affordable. A struggling homeowner can take advantage of this plan as long as they qualify. You must meet all of these requirements to qualify:
– Your home must be your primary residence
– The amount you owe on your first mortgage must be equal to or less than $729,750
– You must have received your mortgage before January 1, 2009
– You must have a reduction in your income, have had a serious hardship (such as medical bills), or have had a
increase in your mortgage payment
Banks, like Wells Fargo, may have additional qualifications, so check with your bank to see what terms you must meet to qualify. A loan modification works by changing the current terms of the mortgage. The lender can reduce the interest rate to as low as 2%, can lower the monthly payment amount to 31% of the owner’s gross monthly income, can extend the loan for 40 years, and in some cases, can even change the principle . loan amount. Lenders know what they are doing and only care about their bottom line. It is best to seek the help of a professional when it comes to getting a modification.
This program may not help everyone, but it can help many homeowners who are struggling to make their mortgage payments or who don’t qualify for a refinance. If you think you may qualify, it wouldn’t hurt to try to take advantage of this program.