The federal mortgage assistance programs - Hope for Homeowners, Making Home Affordable, HAMP, HARP, and HOPE all fall under the "Making Home Affordable" umbrella. The federal programs provide help to struggling home owners in two ways – by either refinancing the existing mortgage, or by modifying the existing home loan.
Refinancing The Home (HARP)
It’s possible for you to qualify for the making home affordable refinance program option if:
- Your existing mortgage is owned by Freddie Mac or Fannie Mae
- The loan-to-value ratio of your first or primary mortgage does not exceed 125%
- Your mortgage payments are current and regular
The borrower can still qualify for this Obama's making home affordable refinance program option even if he or she is upside down on the mortgage, but has the required loan-to-value ratio. The HARP program is basically meant for home owners whose mortgages have depreciated in value in the recent times, and the collateral fails to provide enough financial guarantees for the existing mortgage.
Modifying The Loan (HAMP)
This home affordable modification program option is meant for borrowers who’ve fallen behind on their mortgage payments, or are not able to afford the monthly mortgage payments due to various reasons. If you’re currently paying an adjustable rate on your mortgage and the rate has increased, the modification makes it possible to obtain a fixed rate of interest and do away with the ARM. Another advantage of the HAMP option is that it helps in restructuring your existing mortgage by extending the loan term, decreasing the net rate of interest, and even reducing the monthly mortgage installment amount. It’s one of the best option to save your home if you’re currently facing a foreclosure, or likely to face it in the near future. For getting your HAMP:
- The mortgage loan balance should be less than $729,750
- The monthly payment for your main or primary mortgage (in case you’ve taken a secondary mortgage or a home equity line of credit - HELOC) should be more than 31% compared to your gross monthly income
The main objective of availing a HAMP is to modify or restructure the terms and conditions linked with your current mortgage and make the monthly mortgage payments more affordable.
Eligibility For Home Affordable Modification Program
To become eligible for HAMP, the applicant:
- Should own and occupy the home
- Should have obtained the current mortgage on or before January 1, 2009
- Should have less than $729,750 owed on the existing mortgage (for a single unit home)
- Have a monthly gross income more than 31% of the proposed modified loan’s total monthly installments, including the property tax and insurance
- Has to provide a convincing financial hardship letter containing at least 3 critical factors explaining why it’s difficult, if not impossible to make the monthly mortgage payments and remain current with the existing mortgage
If you want to modify your existing loan and get the HAMP benefits, RefinancITT can help you become eligible for it. An effective hardship letter and proper documentation can help you get a reduced interest rate – as low as 2%, and even extend your term up to a maximum of 40 years. Our attorneys can help you work out your home loan modification.
Deciding which option to take
It’s very important to decide which option is the best for you depending upon the current status of your mortgage. The refinance option gives an opportunity to completely overhaul your existing mortgage by paying off your home loan and obtaining a new "refinanced" loan with a reduced rate of interest and affordable monthly payments. The modification option provides the same benefits of reduced interest rates and affordable payments, however a new loan is not taken out and your existing home loan is restructured to make it affordable. It’s recommended you provide us your contact details by filling out our Online Application Form, so our federal program expert can call you and provide you free no obligation help and guidance to help you deal with your mortgage related issues and problems in an organized and effective way.