How to Lower a Home Loan Under a Government Program
Many individuals find it tough to make their mortgage payments from time to time. This can be due to adjusting interest rates, job loss, and a host of other circumstances that make meeting their monthly obligations under their mortgage almost impossible. But, instead of facing foreclosure, there are alternatives available to help you stay in your home. The federal government has created opportunities designed to help you lower the payment on your existing mortgage or help you refinance to lower your monthly mortgage payments and keep you in your home.
Other People Are Reading
Instructions
-
-
1
Determine what program you qualify for. If you are already behind in your mortgage and may be facing imminent foreclosure, or the value of your home has decreased significantly, you will not be eligible to refinance your loan. However, you can qualify to have your existing loan modified. HOPE for Homeowners is an FHA backed refinancing option that allows homeowners struggling to make their monthly payments but have yet to fall behind refinance their homes into a more affordable mortgage. The original loan must have originated before Jan. 1, 2008, be current, the borrower cannot own a second home, and must be willing to fully document the new loan to qualify for assistance. A loan modification works by reducing the interest rate of an existing home loan by the lender to create a monthly payment that is affordable by the borrower. Borrowers who are behind or cannot refinance due to their home's decreased value can take advantage of this program.
-
2
Apply for assistance. To take advantage of the Hope for Homeowners FHA refinance program, a borrower can contact their current lender, if they are an approved FHA lender or another FHA approved lender to see if they qualify for the Hope for Homeowners refinance program and complete the application process. Be prepared to submit income statements, bank statements, debt statements in support of the new loan. If a homeowner does not qualify for a refinance under the Hope for Homeowners program, the borrower will need to contact the existing lender to begin the process of mortgage modification. The existing lender will work with the borrower to lower interest rates and potentially write down the principal balance to create a new payment that is affordable for the borrower in exchange for avoiding foreclosure and incentives from the federal government. Each lender's application process is different.
-
-
3
Begin making payments under the new arrangement. It is important to note that loans should be kept current, whether refinanced or modified, as this will stop any additional negative information from being reported to your credit file.
-
1
