If you find yourself in a tight position and are falling behind payments, you might want to try getting a loan modification with American home mortgage. A loan modification is an agreement between a borrower and lender to change the terms of the loan. This change gives the borrower the flexibility to pay lower amounts of the monthly mortgage installments. Loan modification with American home mortgage also allows the borrower and lender to change the terms of agreement if they choose to.
Under the loan modification with American home mortgage system, the government of America has developed a Make Home Affordable Program. This program comprises of two sections. One features loan modification while the other features the refinancing of the loan. The loan modification plan will allow you to reduce the mortgage payments which you struggle to pay every month. The Home Affordable Modification Program (HAMP) is a part of the loan modification plan.
Eligibility for HAMP Loan
In order to be eligible to receive HAMP loan you need to have:
- A mortgage before January 1st,2009
- Should be an owner or resident of the house
- For a single family home have an unpaid balance of $ 729,750
- Unable to pay mortgage due to financial conditions such as medical expenses. In such a case, you need to present an affidavit of financial hardship.
- Monthly mortgage payment should be more than 31% of your gross monthly income exclusive of taxes.
Under the system of loan modification with American home mortgage, if your current mortgage value is greater than your income you can also receive this loan to help you get back on your feet.
If however, you bought the house as an investment and do not live in it, you cannot apply for this loan. Financial hardship might also include the death of a family member or a divorce.
How to get Loan Modification
If you are planning to apply for loan modification you need to keep certain things in mind. The most essential thing is to collect the following data and document it.
- The household’s monthly gross income.
- Recent income tax return.
- Data regarding your assets.
- The mortgage rate of any other house you own.
- Account balance and payments on credit cards.
- A document explaining the reason for asking for the loan such as illness.
After all these documents are collected, you need to contact your mortgage provider to put your name on the list for the loan modification program.
Article Source: http://www.articlesbase.com/mortgage-articles/how-to-work-out-loan-modification-with-american-home-mortgage-4705467.html
About the Author