Oftentimes, homeowners find that they have taken on a bigger mortgage than they can truly afford. With the recent economic downturn, thousands of homeowners are on the verge of foreclosure due to the fact that their mortgage payments have ballooned beyond control or that they have lost their jobs and no longer have sufficient income to meet the monthly payments. However, relief is in sight in the form of loan modifications for these types of mortgages. If you are familiar with the Obama Stimulus Package, you know that one thing that is offered is help with loan modifications. This is to help weary homeowners avoid foreclosures. Many people try to get a loan modification on their own but cannot get approved. However if you follow guidelines set down by the government, then it is likely you will finally be approved.
Why Modification May Be Right For You
Modification of your mortgage can accomplish several goals. The most obvious goal that can be met with loan modification is that you can refinance to a lower monthly payment that is more in line with your income so that you have more money left over from your paycheck to meet other basic living necessities. Loan modification can also help you secure a lower rate of interest so that you do not pay as much over the life of our loan, and so that more of the money being paid goes toward the principle balance owed, not just for interest charges.
Must Go With An Approved Lender
Not every lender out there is approved under the Stimulus stipulations. You need to check and see if the lender you are doing business with is on this list. Currently, there are six approved lenders on this list. These are the only lenders that can receive the incentive offered by the Federal Government to finance these loan modifications. It is possible that other lenders will be added in the future. If your lender is not on the list, inquire with them to find out if they may be getting approved soon.
Current lenders that can help you modify your mortgage under the terms of the these lenders include Chase Home Finance ( managing loans for JP Morgan Chase), Wells Fargo: (manages Wachovia and Wells Fargo), Citi Mortgage (manages Citi Bank), Washington Mutual and EMC, Saxon Mortgage, and GMAC.
These lenders are competing for your business because they will receive $1000 for each loan modification that they provide. Therefore you have a better chance of actually getting approved for a loan. This money is being provided by the Federal government. You have the option of visiting these lenders in person, phone, or by visiting their website. You can save time by applying online as they approval process is much quicker that way.
Although these are currently the only approved lenders, there are still other lenders that are trying to get approved. When applying to one of the approved lenders, be sure to do some research and see if you are qualified as well. These qualifications include: mortgage title owned or insured by Fannie Mae & Freddie Mac, and that mortgage value must surpass by 105% the current market worth of the home.
Your Rights As A Borrower
You are legally allowed to inquire if the lender is insured by Fannie Mae & Freddie Mac. Hopefully you can finally relieve some of your financial burden by taking advantage of this program offered by the Stimulus package. Everybody needs help right now and this is the perfect option for you to benefit from.