Can The Home Affordable Modification Plan Actually Save Your Home?

What HAMP Loans are All About Economic stimulus, incentives for home loans, mortgage loan modification programs â€" these and more are the solutions that the federal government has come up with to somewhat ease the financial burden off homeowners. Since President Barack Obama was sworn in, one of the incentives initiated by the government is called the Home Affordable Modification Plan or HAMP. Specifically, HAMP is part of President Obama’s initiative to make homes more affordable for the average American, and to prevent those facing foreclosures to save their homes. What HAMP does is allow homeowners with mortgage loans to qualify for a lower monthly payment through loan modification. If qualified, you can lower your monthly payments to almost 31% of your pre-tax income. To make mortgage investors offer such a huge leeway for borrowers, the Obama administration offered incentives to them as well. If everything goes according to plan, HAMP is supposed to prevent four mil
lion homes from being foreclosed. Factors to Consider when Taking Advantage of the Program Now, what are the things that you need to keep in mind if you wish to take advantage of this mortgage loan modification program? Take a look at the following list:1.    Determine if you qualify for HAMP. To qualify for this home loan modification program, a few things will be tested. If HAMP is something that you wish to take advantage of, a Net Present Value Test will be performed. What this test does is simply compare the expected cash flow generated by the loan after it has been modified, against the expected income if the loan is not modified. If it is seen that it makes perfect financial sense to have the loan modified, the loan servicer will approve the loan. 2.    Remember that HAMP is all about payment reduction. Keep in mind that since your primary residence is what is at stake here, the main goal of HAMP is to allow you to keep your home by reducing your monthly pay
ments. 3.    Your debt-to-income ratio should be at least 31%. There are programs guides implemented in HAMP which requires a loan service to reduce the payment from 31% to 38%.  Otherwise, the amortization will be extended up to 480 months. 4.    HAMP is not meant to help investors and speculators.  For an individual to qualify for HAMP, the home should be his or her primary residence. Investors and speculators are not allowed to participate in the program. 5.    Take note that there is an income verification process and a trial period. Just as it is with any other government incentive, the process of applying for HAMP is not without challenges. The income verification process is quite long, and there is a trial payment period. The goal of the latter is to train borrowers to make on-time payments â€" there is no grace period. Just as it is when applying for any type of program, you need to learn about the basics of HAMP. If it is determined tha
t you do qualify, then it just might be the solution that you are looking for to save your home.



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