Federal Plan

Do you qualify for the federal HAMP loan modification plan?  Just what is debt ratio and why is it a critical part of the application and approval process.  You may need loan modification help to get a lower mortgage payment-and the good news is that help is available if you know how to get it.  $75 billion dollars waiting for eligible homeowners, but you must be able to prove you are qualified and can meet the approval guidelines put in place by the Federal government and your lender. An eligible borrower must meet certain debt ratio requirements, do you know how to calculate your ratios and complete your budget correctly?

The HAMP loan modification plan has standard guidelines in place for qualifying-one is debt ratio.  First off, let’s explain what debt ratio is and why it is important to the banks. Debt to income ratio simply means the percentage of your income going out each month for bills as compared to how much money you earn each month. This is translated into a percentage figure that your lender will review. Every loan modification program has a debt ratio percentage that is acceptable. Most lenders look at 2 ratios-one that is just for your housing expense and one for your overall expenses-including housing. Housing debt ratio for example:

• Income = $3800 gross per month
• House Payment (including property taxes, insurance and homeowners dues) = $1950
• Housing debt ratio = 1950 divided by 3800 = 51.3%

Your debt ratio is the method the banks determine if you can afford to pay the mortgage payment. If your ratio is too low, that can mean that you are not facing a financial hardship situation and do not need a loan modification. If your ratio is too high, then you will be a risk for default in the future. The Federal program implemented by President Obama-HAMP- aims for a 31% modified payment-including taxes, insurance and homeowners dues. This means your new, modified mortgage payment would be reduced so that it now equals just 31% of your gross income. However, if your total debt ratio-including the rest of your bills & expenses-exceeds 52% then you may have to agree to credit counseling.

If you don’t fit into the HAMP loan modification plan then you might qualify for another program.  Most lender guidelines allow for an acceptable range between 38-45% for their proprietary or in house loan modification programs. It is so important to work on your financial statement before you ever call your lender.  What if you  need to make some minor adjustments to your budget in order to fit into the debt ratio requirement? You want to know this ahead of time. Make it easy by using a software program that is designed just for homeowners to help them apply and qualify for the federal loan modification plan, HAMP. All you do is input your own income and expenses and the software calculates it all for you. The debt ratio, new target payment, new interest rate and disposable income are all figured automatically. You can see immediately if you might need to make some adjustments.

Don’t blow this chance at getting the help you need.  When you are able to figure your own ratio and make adjustments to your budget so that you fall within the approval guidelines, you are giving yourself the inside edge you need for quick approval. You only get one opportunity-make sure you understand how to complete your budget, adjust your expenses and are able to meet the requirements for approval.

Feeling overwhelmed and confused? You don’t have to try to figure this all out alone.  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.