Obama Loan Modification Plan – What Are The Qualifications?
To encourage the mortgage lenders to refinance their borrower’s mortgages into low interest rate, Obama has introduced a loan modification plan which helps millions of struggling homeowners to receive an affordable mortgage. Getting low interest rate can be helpful to anyone. There is a number of Obama loan modification guidelines which needs to be followed to get qualify. One should meet all these guidelines to qualify for the program.
The first basic requirement for the loan modification agreement is that one must prove that he was suffering from financial hardships which were out of his control. This program is not necessarily meant for those who on the mortgages payment which were beyond their means. Instead the federal plan is designed for all those who are suffering financial hardships. The example of financial hardships include loss of a job, loss of an income, death of spouse, divorcee etc.
Other thing which is needed for home affordable modification program is that the monthly housing payment including the mortgage payment, real estate taxes, association dues, insurance etc should not exceed 31% of the monthly gross income. If the monthly payment exceeds 31% of the monthly gross income then the modification plan will work to reduce the monthly payments of an individual in some different manner. The program can even extend the repayment term i.e. up to 40 years. And secondly the program can even work to lessen the interest rate. If the payment is high even after reducing the interest rate and extending the repayment term than a portion of the debt can also be subsidized by the mortgage modification program folks.
The third major requirement which is necessary to qualify for the loan modification is that the mortgage should be on the primary residence of an individual. The program doesn’t give permission to refinance on an investment property. One also needs to order a home inspection and an appraisal to modify his loan. Before modifying the loan, federal loan modification program advice from an expert is recommended. If a person is eligible for all the three basic guidelines than he can easily get the loan modification done.
