How to Use Government Programs to Help Reduce Your Mortgage Payment
When you have a large mortgage payment, it can be a financial burden unlike any other. This can lead to missed or late mortgage payments and devastating effects on your credit score. If you need help with your mortgage, you may want to turn to government programs. The Making Home Affordable initiative is a government program that helps homeowners get lower mortgage payments to work with. You could facilitate a loan modification or a refinance on your existing mortgage.
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Instructions
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Contact your lender about the possibility of a loan modification. Your lender will have information about how to apply for the Home Affordable Modification Program or HAMP. If you are behind on your mortgage payment, you need to contact the loss mitigation department to get more information about this program.
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Determine if you are eligible for the home modification program with the help of your lender. You have to be able to meet certain qualifications that are set forth by the government. For example, you have to have a mortgage payment that is in excess of 31 percent of your monthly gross income. The value of your house also has to be within certain limits depending on what type of home it is.
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Fill out the application for the Home Affordable Modification Program. Once you have the application filled out, you will also have to provide other information. You will be required to provide financial information such as bank statements and expense reports. You might have to provide copies of your tax returns and other financial documents. Your lender will also want a hardship letter that you have written. This is a letter that details your financial problems and explains why you are unable to continue making your mortgage payment.
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Wait for a decision from the Home Affordable Modification Program. This program provides financial incentives to your lender if they agree to modify the loan. You will be notified if the modification goes through.
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Apply for a refinance under the Home Affordable Refinance Program. If you do not qualify for the modification program or wish not to use it, this program is an alternative to consider. This program also provides incentives for banks to refinance existing loans. With this program, you can refinance even if you owe up to 125 percent of the current value of the house. Fill out the necessary paperwork and wait for a decision.
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