Be your own master - Compute the Loan modification yourself

By: Refinanceitt.com | Views: 782 | Date: 25-Jan-2011

Become your own boss and your own master. Why be dependent upon the lender to give the verdict of your eligibility in terms of finances for HAMP Loan Modification? Read more to find out how easy it is to compute the HAMP Loan Modification and stay away from forged claims many lenders might seem to make.


HAMP Loan modification is one of the loan modification processes of the Obama’s Making Homes Affordable Modification Plan, which aims to enable debtors take advantage of their situation and reduce their overall monthly payments spent after reimbursements. Apparently, it is quite a useful one among the other Loan Modification programs in practice and you have the power to estimate your entire set of expenditures once you opt for the Home Affordable Modification Plan. Finally debtors can do away with their nightmares of foreclosures; since the loan modification process is so well designed that it benefits both -- the creditors and borrowers with incentives.

For stressed homeowners, applying for HAMP loan modification program to significantly reduce their burden by lowering mortgages payments and save their homes from getting foreclosures. However, no all did succeeded in modify loan terms with their mortgage lenders. Therefore; before getting upon the HAMP application process it very important for you to understand the entire process fully.

One can easily calculate the maximum payment and modification of loans similarly as the lenders. It should be noted that even if with certain reasons the borrower is denied for the approval than with the recent changes as on 1/1/10 the servicer should tell him why he was denied. Thus he can make the changes and can again reapply. The loan modification process is actually quite simpler and one can easily compute the future expenses one is going to make. This gives people a better idea about whether or not to go for the HAMP Loan modification. There are few home affordable modification program guidelines which a borrower should know before applying.

•    First step is to gather all the pertaining and needed information. This includes the most current mortgage report and other related information. One should exactly be acquainted with the total earnings prior to tax deductions; the lenders will use a calculation of 31% which is on the basis of new modified payment. This includes property taxes, homeowners insurance, mortgage payment for first loan, and home owner alliance dues. A borrower should gather all this information and should know that the gross modified payment cannot exceed the 31% of the gross income.
•    The gross income is then multiplied with 31% to get the 31% Debt to income ratio (DTI).
•    Then the maximum total payment i.e. the 31% is taken, if the current payment is greater than this figure, then the home owner is eligible for HAMP loan modification.
•    On the contrary, If your maximum payment did not get to 31% of your gross income using step 1 and 2 and your lender does not subscribe to deferring principle then your HAMP loan modification request can possibly qualify for another internal program, or denied, if denied then you need to increase your income, try to lower your insurance and property taxes, if possible and then reapply and let your lender know you have new information to submit.

Above are simple steps to make an estimation of your current financial status and thus know whether you’re likely to qualify for the home affordable modification program. In case you are not going to qualify for HAMP, you can always hire a debt counselor who has enough expertise in HAMP loan modifications and debt relief. Such expert personnel would be able to guide you better on to the right path to save your home and thus select the best alternative.

Resource Box

To get important details on HAMP Loan Modification program requirements and process, author recommended utilizing the professional services provider like RefinanceItt.com online. Visit: http://www.refinanceitt.com

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