Are You Looking For Information on the Loan Modification Program?

Many people are asking the question, what is a loan modification program. These programs are popular at the current time due to the economy. They are a way of avoiding foreclosure by modifying the terms of the original loan to make the loan payments more affordable to the homeowner.

A loan modification program is something that many lenders have put in place so that their loan holders will not be in default. There are several different types of loan modifications, but the two most common are a refinanced loan that has a lower interest rate and a refinanced loan that goes from a variable interest rate to a fixed interest rate loan.

Individuals that got mortgages through subprime lenders may have an interest rate that is higher than normal, making it difficult to maintain their loan payments. The federal government has also introduced a loan modification program that allows homeowners to modify the terms of their loan if they are in foreclosure or are experiencing a hardship, such as; an increase in payment or a decrease in income. You will be expected to have a plan that will explain how you expect to keep on top of your new payment arrangement.

If you have variable interest rate loan, at some point in time your payment will increase and sometimes this increase is substantial. Refinancing your current loan with a loan modification will save you a lot of money and make your payment affordable. The government has also introduced an option for refinancing your home through a program they have made available. You will need to be current on your payment and there is a limit on the value that your home can have to qualify. Your loan must be backed by Fannie Mae or Freddie Mac and your home has to be worth more than what is still owed on the home. The government is trying to help these companies regain the strength that they once had.

Loan modification programs are part of what is going to stabilize this country’s economy, by allowing people stay in their homes and keeping this country from having millions of unoccupied homes. If you are seeking help with mortgage payments, contact your lender and see what options they have available and if they can advise you in what step to take next. The federal government has recently allocated money to assist homeowners going through a hardship. You do have options.