RMA LOAN MODIFICATION FORM-WHAT EXPENSES YOU NEED TO LIST

Apply Correctly

1. The current mortgage payment-whether it is a fully amortized (principal and interest) or an interest only payment-show whatever the base monthly payment that you are required to pay
2. Do you have a second mortgage on the property?  If so, list that monthly payment amount.
3. Property taxes-even if they are currently impounded as part of the amount you pay each month, take your annual tax bill and divide it by 12, then list that amount as your monthly tax obligation.
4. Homeowners insurance, again take the annual premium divided by 12 months, equals your monthly obligation for this.
5. Credit card or installment payments-only list the minimum payment due, even if you sometimes pay more.  The bank will only budget you for the amount you are required to pay.
6. Alimony, child support payments should be listed on your RMA form financial worksheet page.
7. Rental Expenses-do you own rental properties? If so then list the mortgage, maintenance, etc expenses.
8. HOA Dues for the property you are applying for the loan modification need to be listed as an expense
9. Car Payment-only list those that you are responsible for and actually paying
10. Misc. expenses such as groceries, utilities, tuition, gasoline, transportation, health insurance, prescriptions can all be listed

Exact Requirements

The RMA loan modification form when completed correctly shows your lender that you are in a financial hardship situation, meaning that your current payment is not affordable.  Your monthly expenses are so high that you are barely making ends meet each month, and if they do not help you then you will be at risk of defaulting on the mortgage.  However, just as important is to show them that a loan mod will be a solution for your particular situation.  You need to make sure that the total expenses you list prove this-you can verify your current and proposed cash flow by running you figures through the loan modification calculator.  This program is designed specifically for homeowner use and it will instantly compute and display your own specific budget requirements.

Most homeowners do not understand how to complete their RMA form and so they get turned down for a loan workout.  Remember, it is up to you to prove to your bank in black and white that you are a good candidate for a loan mod.  The only way to do is to prepare and submit your monthly budget figures-income, expenses and assets-correctly and so that they pass all of your lender guidelines for acceptance.

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When you contact your bank and ask for consideration for a loan modification, they will send you an application which must be completed and returned for review.  This is a 3 page form and it includes your financial statement.  Basically, this is a detailed accounting your household monthly gross income and monthly expenses.  This is probably the single most important loan modification form as it will really determine whether you qualify for assistance or not.

It is important that you take your time when you prepare this loan modification  financial statement, making certain that your figures are not only accurate but that they are acceptable.  How do you know what is acceptable to your bank?  Well, you can get the inside information on just what will qualify and then use that information to fine tune your own budget.

When the Fed launched their loan modification plan called HAMP, they instituted a standard formula for determining which borrowers would be eligible.  This is basically a mathematical equation that is used to qualify borrowers based on their financial information provided on their application.  So, it really makes sense to learn and use this same formula when submitting your financial statement.

How does this formula work and how can you apply it to your own financial statement?  Well, it is based on your gross income, your current mortgage balance and monthly payment, as well as your cash reserves and other debts.  To make it simpler for borrowers to figure all this out, an easy to use software program has been developed that actually mimics the formula.  All you need to do is input your income and expenses, and the calculations are done automatically.

You can then use this information to fine tune your own budget, and then prepare your financial statement so that you know your figures fit right into the HAMP guidelines.  Remember, that there is no guarantee that even the most qualified homeowner will be offered a loan modification, the lender is the only one you can make that decision.  But one thing is certain-if you don’t fit into the approval formula you don’t stand much of a chance at all.

Prepare your application correctly!

Susan Gregory is the author of two resource books for homeowners and real estate professionals, the best selling The Complete Loan Modification Guide Kit and The Stimulus Book-HAMP & HAFA Edition.  She also teaches workshop training classes for the federal programs to help real estate professionals assist homeowners with home retention and exit strategies.  The Complete Loan Modification Guide kit provides a valuable resource for borrowers that includes a step by step handbook, required forms, and a software program that mimics the federal approval triggers for loan modification.  An advocate for homeowners, Susan also offers free 30 day email support for all of her clients who purchase her publications.  Thousands of homeowners have been helped using these materials.  Visit http://www.myloanmodficationcenter.com for more information.

What are the required forms and where can you get them? Below is a list of the loan modification forms that most lenders will require to consider your application:

1. Borrowers Statement: This is an information sheet that includes the borrowers basic information, like name, address, social security number, dependent information, job history, etc.
2. Financial Statements: This is a snapshot of your current financial situation that itemizes all of your income and expenses each month. This is where you demonstrate to your lender that while the current mortgage payment is a hardship, the new lower modified loan payment will be affordable. Make sure you figure your debt ratio, target payment and disposable income correctly!
3. Hardship Letter: You must prove to your lender that you have or will suffer a financial hardship causing the current mortgage terms to be unaffordable. A compelling and convincing letter will help your lender to decide in your favor.  Keep it short but descriptive-one page is ideal.
4. Submission Cover Sheet: Use this form to tell your lender what new loan terms and mortgage payment you are requesting. When you prepare your target payment ahead of time, you will be able to negotiate with your lender to achieve the new payment that will be affordable and sustainable for your family.
5. Rental Schedule: Use this form if you have investment or rental properties to show the bank the monthly cash flow and equity position.

Federal Plan

The Financial Statements are really the single most important part of your application. Based on how you prepare this form, your lender will make a determination as to whether you qualify or not. That is why it is so important to work on this ahead of time-do not give your bank any information about your income or monthly bills until you have sat down and worked out your budget. The goal is to show the bank that the current payment is unaffordable and that you cannot make ends meet. But you most also be able to show them that you will be able to pay and maintain the new modified payment each month, and have a little bit of disposable income left over for emergencies. This is easy to do when you use a Current Financial Statement and a Proposed Financial Statement and when you have determined your target payment. Your target payment is your goal-make any necessary adjustments to other parts of your budget so that you prove clearly to the bank that you can afford the new, modified payment.  If you are not sure how to figure your debt ratio, target payment or the other critical calculations, use a software program designed specifically to assist homeowners avoid mistakes and prepare their application correctly.

The secret to a successful application is to complete the required loan modification forms so that you have met your lenders guidelines for approval. You must take the time to learn those guidelines and know how to prepare your forms properly so that you will have the best chance of success. Even the most deserving borrower may denied the help they need if their loan modification application is not completed properly. Make the decision to become informed and be prepared so that you can have a fighting chance to save your home. This is to important to leave to chance-thousands of homeowners have already gotten help and you can too!

Download immediately!

Get the help you need to prepare your own accurate and acceptable loan modification application. The Complete Loan Modification Guide kit is the best selling do-it-yourself system that takes the guess work out of preparing your financial statement, hardship letter and all of the required forms your lender needs. You get an easy to use software program-Loan Mod Quick App-as well as an easy to understand handbook with step by step directions. Why take chances with your application? Simply input your unique financial information into the Loan Mod Quick App and it calculates it all for you! It couldn’t be easier-end the frustration-Visit myloanmodificationcenter.com and order today.

Federal Plan

Completing your loan modification forms correctly is the key to getting approved for the loan workout you need.  The fact is that your lender will base their decision in large part on the information you provide to them-so make sure that you have the upfront information you need to do it right.  Here are a few important tips that your lender won’t tell you-but that you need to know before you apply for a loan modification.

First of all, know what you are asking for on your loan modification forms.  This means that you have figured out a new family budget and determined an affordable new mortgage payment that you can pay and maintain.  This is called your target payment, and this is your goal when working with your lender.  Your loan modification forms need to prove clearly, in black and white, that you can afford this new modified target payment so that your bank will be motivated to help you.  To compute your new target payment, you must take into consideration your lenders debt ratio approval guidelines so that the new payment not only fits your budget, but also meets the banks criteria.  This is not hard to do once you understand how to calculate your own debt ratio-you can get directions on how to do this with the help of a handbook.

The federal plan called Home Affordable Modification or HAMP, has set a target payment that equals just 31% of the household gross income.  Keep in mind that this payment also includes your monthly property taxes, homeowners insurance and any homeowners dues.  The goal is to give you an affordable and sustainable mortgage payment to avoid foreclosure.  It is important to know what your target payment is-you may need to adjust your budget so that your lender will see that after modification you will be able to afford to make that payment every month.  Sometimes just a couple of hundred dollars one way or the other can make or break your application.  You need to know this ahead of time when you are preparing your loan modification forms.  The Loan Mod Quick App software will calculate all of this for you automatically.

Here’s an important tip when completing your loan modification forms-be sure that you have eliminated any unnecessary expenses from your financial statement.  Your lender is looking to see that you have made home ownership a priority, so items like luxury car payments, club memberships or frivolous expenses will not be looked on favorably.  You must prove to your lender that you are doing everything you can to save your home, and convince them that you are a good candidate for a loan workout.

Do you know about disposable income?  This is a very important consideration for many lenders when reviewing your loan modification forms. This refers to how much cash you have left over each month after paying all of your expenses.  Why is this important?  Simple, everyone has unexpected expenses, emergencies, etc. that require some extra money.  If your budget is so tight that you have no money left over and something comes up, you may not be able to pay your modified mortgage payment.  This causes your lender to feel that you might be a risk for re-default-and they do not want that to happen.  The trick is not showing too much or too little money left at the end of the month.  The Loan Mod Quick App software will show you immediately if you need to fine tune your budget, before your lender ever reviews you application.

These three tips will help you complete your loan modification forms correctly,  so that you have the best chance of success.  Let’s face it-your lender does not have to offer you a loan workout-it is up to you to present your situation in the best possible light so that they will be motivated to help you stay in your home.  It’s not hard to understand, but make sure that you take the time to learn about all the tips and insider secrets you need to know before you prepare and submit your loan modification application.  It could be the difference between success and failure.

Get the help you need to prepare your own accurate and acceptable loan modification application.  The Complete Loan Modification Guide kit is the best selling do-it-yourself system that takes the guess work out of preparing your financial statement, hardship letter and all of the required forms your lender needs.  You get an easy to use software program-Loan Mod Quick App-as well as an easy to understand handbook with step by step directions.  Why take chances with your application?  Simply input your unique financial information into the Loan Mod Quick App software and it calculates it all for you!  It couldn’t be easier!  Visit www.myloanmodificationcenter.com to get started today.

When your families home is on the line, it is not the time to take any chances with your loan modification approval.  You need to make sure that you have the very best chance at approval for a lower, affordable mortgage payment.  A crucial part of your application is the loan modification forms.  The truth is that how you prepare this paperwork will have a big impact on whether you are approved or denied a loan workout.  So, it just makes sense to learn what you need to do first in order to complete your application so it has the best chance of success.  Here are a few tips to help you get started.

Your loan modification application will consist of several different forms.  You will be asked to complete a basic borrowers statement.  This is your personal information, like name and address, social security number, employment, dependents, etc.  Be sure that all of the information is correct and can be verified.  You will also have to indicate if you live in the home, if you have roommates or if you rent it out.

Now, here comes the meat and potatoes of your application.  This very important loan modification form is your budget, or financial statement.  This form is a detailed accounting of your income and expenses each month.  Here is where you show that bank that although the current payment is unaffordable, you could afford to pay and maintain the new, lower mortgage payment.  You must list all of your bills-the bank will use your credit report to verify this information.  You can avoid any mistakes by ordering a free copy of your own credit report online and using that information to list your monthly bills.  You need to demonstrate that after you pay all of your bills, including the new mortgage payment, you have a little bit left over for emergency expenses.  Do you know the acceptable amount of disposable income to budget for?  You can take much of the guesswork and frustration out of preparing your financial statement correctly by using Loan Mod Quick App software-it does all the calculations for you.  Designed specifically to mimic the federal guidelines, all you have to do is input your financial information and it does the rest!

You must also be able to demonstrate you are in a financial hardship situation.  This is where you explain your circumstances to your lender about why you deserve a loan modification.  This is not really a form, but you must write a convincing and compelling description of your situation.  This letter shouldn’t be more than one page long, but it also should be compelling and convincing and must be signed by all the borrowers.  Do you know the 3 critical elements to a successful hardship letter?  Follow the helpful hardship letter template included in The Complete Loan Modification Guide kit.

When you take the time to prepare your loan modification forms ahead of time you are able to make any adjustments and fine tune your proposal.  Once you have submitted your application it will be difficult to revise your information. You need to make sure you do it right the first time to increase your chances of approval. You will have peace of mind and feel more confident if you spend just 2 hours preparing your paperwork ahead of time so you do not make any mistakes when speaking with your lender.  Believe me, it will be time well spent.

Get the help you need to prepare your own accurate and acceptable loan modification application. The Complete Loan Modification Guide kit is the best selling do-it-yourself system that takes the guess work out of preparing your financial statement, hardship letter and all of the required forms your lender needs. You get an easy to use software program-Loan Mod Quick App-as well as an easy to understand handbook with step by step directions. Why take chances with your application? Simply input your unique financial information into the Loan Mod Quick App and it calculates it all for you! It couldn’t be easier-end the frustration-Visit myloanmodificationcenter.com and order today.

One of the most important forms is called a loan modification financial statement- this needs to prove to your lender in black and white that you cannot afford the current loan payment because you have more money going out than you have coming in.  But it must also demonstrate the ability to afford the new modified mortgage payment.  How can you do that clearly?

First, you must be able to determine your target payment-this is the new loan payment that you will ask for.  This is the goal-a new lower payment that you can afford and fits into the lenders guidelines.  You then use this target payment as the centerpiece of your new budget-showing the bank that after you pay all of your bills, including the new lower target payment, you have a little bit of disposable income left over for expenses.  The federal plan calls for a target payment that equals 31% of the household gross income.  So, take the total gross income and multiply it times 31%-that equals the new modified payment.  Remember, this includes monthly property taxes, homeowners insurance and any homeowner dues.

Once you determine the target payment, your budget should balance-meaning that you can afford to meet your monthly obligations. This is the goal of your loan modification forms.  You may have to adjust your budget to make it balance,  eliminating some expenses, or trimming others so that you can make the house payments and the rest of your fixed expenses.  This will demonstrate to your bank that you are not a risk of default in the future.

Get the Right Person on the Phone!

Finally, a telephone interview with your bank where all of this information is verified is a big part of the approval process.  You should have your budget all figured out and in front of you before you call your lender.  You do not want to be stumbling about and make a mistake that could throw you out of the approval guidelines.  When you work on your financial statement, and fine tune your budget beforehand, you will be prepared to speak with your lender.  You should have all of your information right in front of you on your loan modification forms so you don’t make a costly mistake.  Loss mitigators say this is the biggest reason for denial-homeowners who are not prepared!

You can get the help you need to apply and qualify for a loan modification by ordering the best selling handbook for homeowners, The Complete Loan Modification Guide. This is a low cost, easy to read, home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly.

Home Edition Loan Modification Kit with Customer Assist

he Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. You also get 30 days of email support to ask questions, a series of insider tips and a monthly newsletter to keep you up to date on program changes. Learn how to qualify for the Obama Federal loan modification plan. Need help completing your loan modification forms?  Find out about our Customer Assist program-you work one-on-one with your very own expert to make sure your application is completed correctly. Get started today on the path to secure home ownership, order The Complete Loan Modification Guide. For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com

This is critical, you must have a goal in mind.  First of all, know what you are asking for.  This means that you have figured out a new family budget and determined an affordable new mortgage payment that you can pay and maintain.  This is called your target payment, and this is your goal when working with your lender.  Your loan modification forms need to prove clearly, in black and white, that you can afford this new modified target payment so that your bank will be motivated to help you.  To compute your new target payment, you must take into consideration your lenders debt ratio approval guidelines so that the new payment not only fits your budget, but also meets the banks criteria.  This is not hard to do once you understand how to calculate your own debt ratio-you can get directions on how to do this with the help of a handbook.

The federal plan called Home Affordable Modification, has set a target payment that equals just 31% of the household gross income.  Keep in mind that this payment also includes your monthly property taxes, homeowners insurance and any homeowners dues.  The goal is to give you an affordable and sustainable mortgage payment to avoid foreclosure.

TIP:  Here’s an important tip when completing your loan modification forms-be sure that you have eliminated any unnecessary expenses from your financial statement.  Your lender is looking to see that you have made home ownership a priority, so items like luxury car payments, club memberships or frivolous expenses will not be looked on favorably.  You must prove to your lender that you are doing everything you can to save your home, and convince them that you are a good candidate for a loan workout.

TIP:  Do you know about disposable income?  This is a very important consideration for many lenders when reviewing your loan modification forms. This refers to how much cash you have left over each month after paying all of your expenses.  Why is this important?  Simple, everyone has unexpected expenses, emergencies, etc. that require some extra money.  If your budget is so tight that you have no money left over and something comes up, you may not be able to pay your modified mortgage payment.  This causes your lender to feel that you might be a risk for re-default-and they do not want that to happen.  The trick is not showing too much or too little money left at the end of the month.

TIPS:  These three tips will help you complete your loan modification forms correctly,  so that you have the best chance of success.  Let’s face it-your lender does not have to offer you a loan workout-it is up to you to present your situation in the best possible light so that they will be motivated to help you stay in your home.  It’s not hard to understand, but make sure that you take the time to learn about all the tips and insider secrets you need to know before you prepare and submit your loan modification application.  It could be the difference between success and failure.

You can get the help you need to apply and qualify for a loan modification by ordering the best selling handbook for homeowners, The Complete Loan Modification Guide. This is a low cost, easy to read, home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly.

Home Edition Loan Modification Kit with Customer Assist

The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. You also get 30 days of email support to ask questions, a series of insider tips and a monthly newsletter to keep you up to date on program changes. Learn how to qualify for the Obama Federal loan modification plan. Need help completing your loan modification forms?  Find out about our Customer Assist program-you work one-on-one with your very own expert to make sure your application is completed correctly. Get started today on the path to secure home ownership, order The Complete Loan Modification Guide. For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com

Mistake #1:  Incomplete or inaccurate information-your lender will run your credit report and compare the information you have provided on your  forms with your credit report.  You must be sure to disclose all of your debts and income, and fill in all of the information the lender needs.  Incomplete or inaccurate forms may be rejected.

Mistake #2:  Not preparing a convincing and compelling Hardship Letter that really explains your situation and gives a valid reason for your financial difficulties.  The goal is to get your bank to empathize with your circumstances, and paint the picture of a committed homeowner, who through now fault of their own, is in need of help to stay in their home with a loan modification to lower their monthly mortgage payment.  When you write a Hardship letter explaining what happened, how it affected you and your plans to get back on track, you give your lender a reason to justify your loan workout approval.  Make sure you include the 3 critical elements of an effective letter by following a helpful Hardship Letter Outline.

Mistake #3:  Not knowing your lenders guidelines for approval and preparing your loan modification forms so they do not meet the qualifications.  Simply put, if you know ahead of time what your bank needs to see in order to approve your application, you will be able to complete your forms so they have the best chance of meeting those approval guidelines.  How can you qualify for something that you do not even know the requirements for?  Why take a shot in the dark when you can increase your chances of completing your loan modification forms properly with just a little bit of knowledge and preparation?  It’s just common sense, learn and prepare, and you will get better results!

The federal loan workout plan, called Home Affordable Modification has made easier than ever to work directly with your lender and get approved.  Because this plan has standard guidelines for everyone-there is no more guess work!  Simply know the basics of what is required to qualify, then complete your financial statement so that if meets those guidelines as closely as possible.  You may have to make some minor adjustments to your budget to meet the target payment and debt ratio guideline.  When you prepare your forms correctly ahead of time, you are giving yourself the inside edge to approval.  Simply put-know the formula-follow the formula and you will most likely be approved!

Don’t just slap your paperwork together and hope for the best-that is a big mistake.  You can avoid these loan modification form mistakes and increase your chances for approval by taking the time to learn your banks guidelines for approval, understand how to complete your application so it meets those guidelines, and submitting an accurate and acceptable loan modification proposal.  Help is available-if you know how to get it.  Make sure you give yourself the edge you need to get the help you deserve.

Home Edition Loan Modification Kit with Customer Assist

Learn the formula for success and get the help you need to apply and qualify for a loan modification by ordering the best selling handbook for homeowners, The Complete Loan Modification Guide. This is a low cost, easy to read, home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. You also get 30 days of email support to ask questions, a series of insider tips and a monthly newsletter to keep you up to date on program changes. Learn how to qualify for the Obama Federal loan modification plan. Need help completing your loan modification forms?  Find out about our Customer Assist program-you work one-on-one with your very own expert to make sure your application is completed correctly. Get started today on the path to secure home ownership, order The Complete Loan Modification Guide. For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com

Learn how!

When you apply for a modification with your lender, you will be asked to supply certain loan modification forms. All lenders require the same basic information from a homeowner and this information is reviewed to determine your eligibility. Here is a list of the basic forms and just what is required on each one.

1. Borrowers Statement: This is your basic information like name, birth date, social security number, employment information. You also show any co-borrower information here, and list your dependents. This form tells the bank how long you have been on your job, if your spouse works and how many people live in your home.  Find this form in Chapter 10 of the best selling handbook for homeowners, The Complete Loan Modification Guide.
2. Hardship Letter-Affidavit of Hardship: A brief description of your current financial situation and what has happened to cause the current mortgage payment to become unaffordable. This is your opportunity to explain your circumstances to your bank and gain their empathy. There are 3 critical parts to an effective letter, make sure you cover them all.  get more information on this in Chapter 2 of The Complete Loan Modification Guide.
3. Financial Statement: The most important part of your application, this form really determines whether you will qualify for a loan modification or not. This is where you detail your income, expenses, assets-a basic snapshot of your financial situation. It is critical to work on this before you call your lender. Why? Because you need time to make any adjustments to your monthly budget so that you can meet the debt ratio and disposable income requirements. Learn about how to prepare you budget correctly in a handbook for homeowners.

These loan modification forms are available on many of the lenders websites, or you can use generic forms provided in the #1 resource for homeowners, The Complete Loan Modification Guide. The secret to success is to work on your application before you contact your bank so that you have the best chance of meeting the approval guidelines. Now is not the time to just throw something together and hope for the best. You don’t have to be an expert or have any experience-just spend a couple of hours learning the basics.

You can get the help you need to apply and qualify for a loan modification by ordering the best selling handbook for homeowners, The Complete Loan Modification Guide. This is a low cost, easy to read, home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly.

Home Edition Loan Modification Kit with Customer Assist

The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. You also get 30 days of email support to ask questions, a series of insider tips and a monthly newsletter to keep you up to date on program changes. Learn how to qualify for the Obama Federal loan modification plan. Need help completing your loan modification forms?  Find out about our Customer Assist program-you work one-on-one with your very own expert to make sure your application is completed correctly. Get started today on the path to secure home ownership, order The Complete Loan Modification Guide. For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com

]]> http://myloanmodificationcenter.com/blog/loan-modification-forms-what-is-required-and-where-to-get-yours/feed/ 0 http://myloanmodificationcenter.com/blog/loan-modification-forms-secrets-to-calculate-debt-ratio-correctly/ http://myloanmodificationcenter.com/blog/loan-modification-forms-secrets-to-calculate-debt-ratio-correctly/#comments Tue, 04 Aug 2009 16:52:39 +0000 admin http://myloanmodificationcenter.com/blog/?p=1028

One of the most important parts of completing your loan modification forms is calculating your debt ratio.  All lenders have approval guidelines that include an acceptable income to debt ratio that you must meet in order to be approved.  Obama’s loan modification plan has a standard debt ratio criteria as well-this is very important to know and understand.  This may sound complicated, but you can easily learn to figure your own ratio by following just a few simple steps.  Remember, this is a critical part of the loan workout approval, so you need to know about this.

Acceptable debt to income ratio is determined by each lender and can vary slightly for their in-house loan workout plans.  However, most banks like to see that your ratio is under 45%.  This means that your total housing expense-including loan payment, taxes, insurance and homeowners dues does not exceed 45% of your households gross monthly income.  The new Obama loan modification plan aims to lower payments so that they equal 31% debt ratio-and the Federal government is sharing in the costs incurred to reach that low percentage.  You should always request the Obama Home Affordable Plan first-that program has the best terms and is the easiest to qualify for.  Learn the approval guidelines in Chapter 3 of the best selling handbook for homeowners, The Complete Loan Modification Guide.

Once you know how to calculate your debt ratio, you can determine your new target payment and discover what it will take to reach that figure.  For example, you may find that by lowering your interest rate to 2% and extending your loan term to 40 years you can arrive at the acceptable ratio.  Then you can complete your loan modification forms correctly to reflect that figure.  Again, this is easy to do when you understand the steps to follow – find your target payment and be sure it fits your budget as well as your lenders guidelines for approval.  The Obama loan modification plan aims for a new target payment that is just 31% of your gross income-this includes the cost of homeowners insurance, property taxes and any homeowners dues.  You can determine your ideal payment by using this 31% figure to help you negotiate effectively.  You can use the simple payment tables in Chapter 10 of the #1 resource for homeowners, The Complete Loan Modification Guide.

Your loan modification forms will demonstrate your ability to meet the debt ratio guidelines.  When you complete your income and expense form, you can clearly show that the new target payment meets the lenders requirements, and get your application approved much faster.  It’s not rocket science, just simple math-calculate, adjust your numbers, then complete the application accordingly.  Take the time to learn this important part of a successful loan modification application and you will have the edge you need to get the results you want.

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You can get the help you need to apply and qualify for a loan modification by ordering the best selling handbook for homeowners, The Complete Loan Modification Guide. This is a low cost, easy to read, home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly.

Home Edition Loan Modification Kit with Customer Assist

The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. Learn how to qualify for the Obama Federal loan modification plan. Need help completing your loan modification forms?  Find out about our Customer Assist program-you work one-on-one with your very own expert to make sure your application is completed correctly. Get started today on the path to secure home ownership, order The Complete Loan Modification Guide, your loan mod in a box. For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com