Refinance mortgage rates have hovered near 60 year lows for months now and many homeowners still haven’t considering refinancing because they don’t think they’ll qualify. If you’ve looked into mortgage refinancing but can’t qualify because of your credit or loan-to-value ratio, there are programs available to help you take advantage of today’s low interest rates. Here’s what you need to know about lowering your mortgage payment if you previously thought refinancing was out of reach.
There IS Another Way…
Many homeowners don’t know that it is possible to lower your mortgage rate without refinancing. You can do this with a loan modification. If you’re struggling to keep up with your monthly payments applying for a loan modification could be the answer you’re looking for. Many homeowners don’t give loan modifications a second thought because they think it’s too hard to qualify; however, there is a government program to help get your loan modification approved.
When you apply for a home loan modification your lender will require you to document your financial hardship in writing. You may be required to give paystubs and bank statements as proof of your difficulties.
What You Need to Know About HAMP
HAMP is the government’s Home Affordable Modification Program. HAMP is for employed homeowners that are struggling to make their monthly payments. Getting a HAMP modification could cut your mortgage payment to 31 percent of your gross monthly income if you qualify. As with any government program there are conditions you must meet to get approved.
Here’s the short list of the qualifications necessary for HAMP:
- Your home must be your primary residence
- You must have had the mortgage before January 1st, 2009
- Your payment must be more than 31% of your gross income
- You cannot owe more than $729,750 on your home loan
- You must document a financial hardship making your payments
- You must document enough income to make your payments
- You have not been convicted of a felony for the past 10 years
If you qualify for HAMP you will have an easier time getting your modification approved then by simply contacting your existing lender.
Many community-based credit unions like Navy Federal Credit Union may be much more willing to approve your loan modification outside of the HAMP guidelines than a faceless giant like Bank of America.
You’ll Never Know Until You Ask…
If you’ve been putting off mortgage refinancing because you’re afraid you’ll be turned away you should apply now, especially if you’re paying six percent or more on your existing home loan. Even if your current lender denies your application for mortgage refinancing other lenders have different rules for underwriting and may approve you.
If you’re not already a member, some community based credit unions offer competitive refinance rates with rock-bottom closing costs like the origination fee. Spend a little time shopping around the best mortgage lenders comparing interest rates AND fees and you can save thousands of dollars and lower your payments.
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You can learn more about getting the best deal on your next home loan while avoiding unnecessary discount points and fees by checking out my free Underground Mortgage Videos.
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