Essential Credentials For Loan Modification Programs Approval

So as to rescue the housing market, President Barack Obama of the United States introduced the loan modification program. This loan modification program helps out troubled borrowers to keep their home even if they can't repay their mortgage payments.

Obama introduce the loan modification program known as (HAMP) Federal Home Affordable Modification Program. This article would provide you with details that you need to know so as to get eligible for Obama's loan modification plan and the advantages you might take delivery of from it.

Home Affordable Modification

This kind of loan modification program helps you alter your home mortgage without refinancing. This program helps those homeowners who might have suffered some type of financial hardship such as without a job, death of spouse or those who have lost their household earnings.

Eligibility criterion for HAMP

The federal government has laid down definite eligibility criterion which you have to fulfill so as to qualify for HAMP.

• Live in your home - so as to meet the criteria for the loan modification plan you have to be living in your own home as you apply.
• Source of income - You need to have some present earnings so as to get entitled for Obama's home loan modification program and you even have to be able to prove your income.
• Loan restrictions - You have to have loan within the limits ($625,500 in high cost areas and for other areas it is $417,000).
• House payments must be more - Your house payments must be at least 31% more than your gross income.
• Obtained mortgage before January 1, 2009 - HAMP is applicable for only those who have obtained mortgage before January 1, 2009.

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Advantages of Loan Modification:

Here are few of the advantages you may find when you apply for HAMP.

• Help you out to extend your loan term almost up to forty years.
• Helps to reduce your rate of interest through 2% to 4.5%.
• Principal amount might even get reduced.
• If you stay present on your mortgage payments, federal government might pay you $5000.

Obama's loan modification plan isn't compulsory for lenders. Though, most of the lenders have decided to contribute in this program. In order to apply for HAMP, you ought to contact your mortgage lender first however prior to you get in touch with your lender, you have to keep your complete documentation prepared so as to get loan modification approval fast.