A loan modification calculator is used to figure out how much you can save if you got a loan modification. It tells you whether you qualify or not for the Obama mortgage plan and it gives you an overall figure of how much you have to pay monthly on your new mortgage payment. It is quite simple to use. All you need to do is to fill up a few simple questions and you are done. You will find links on the bottom of this article directing to an online loan modification calculator. Best of all, it’s free.
First, you have to know what the Obama Mortgage Plan is? This program is relatively new. It was created by the different fields of government including the Department of Housing, the Treasury Department, and the Urban Development. It’s purpose is to help homeowners deal with now unaffordable mortgages . There is no doubt that the past economic downturn has left thousands of Americans in financial turmoil. Because of this, many citizens are facing foreclosure. So President Obama wants first and foremost to help these families and individuals avoid such a tragedy.
This program is known as the Making Home Affordable Project. It has an official website which gives anyone complete information about the project.
The Making Home Affordable Project will allow some homeowners the opportunity to refinance their mortgages using a streamlined process. It has been reported that, to date, it is expected to help at least 7 million homeowners refinance their homes at significantly lower rates . In order to make the project a success, the government will be giving incentives to both creditors and borrowers.
The program is designed to help homeowners in 2 ways: Refinancing or Modification.
Refinancing – This part of the program is for homeowners whose properties have suffered a decrease in value. Because of this, they are not able to take advantage of the current low mortgage rates to refinance their properties. To be eligible for this program, the first mortgage of these homeowners must be 105% or less of the current market value of the property.
Modification, on the other hand, is designed for homeowners who do not have the financial capacity to cope with their monthly mortgages. Many nowadays simply cannot afford their monthly dues because of the increase of interest rates, loss of jobs, drops in wages, and many more other reasons. With this program, one’s monthly mortgage payment is made more affordable. The terms of the loan is modified so that the payment for the first mortgage does not exceed 31% of the borrower’s gross monthly income.
For those who cannot afford even a 2% interest rate on their mortgages, there are provisions included in the program for them too.To make the monthly mortgage payment more affordable, the length of the period to pay the debt could be extended up to 40 years. And in some instances where the borrower is deep in financial problems, he/she would be allowed to defer repayment of a certain amount of the debt. And some part of the debt may even be forgiven.
It is quite easy to find out if you are qualified for the program: simply go to the official Department of Treasury website – FinancialStability.gov. You will find everything you need to know about Making Home Affordable Program there.
Go to the page where the quiz section is posted. Complete all forms honestly and completely. The system will evaluate your situation automatically. If the system decides that you qualify for the program, it will automatically direct you to another page. In this page you will be given a list of required documents that you will need to submit to a loan officer.
The US government is trying its very best to help out all individuals who have been gravely affected by the economic crisis of late. If you are a homeowner who is concerned about not being able to pay your monthly mortgage payments or you are terrified of losing your precious home to foreclosure, do not hesitate to check their website as soon as possible. The sooner you deal with the problem, the faster you get to calm your woes.
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