More and more people are finding themselves on the brink of foreclosure and looking into home affordable modification programs. They know that these programs are suppose to help them keep their homes, but aren’t exactly sure what it is or how to benefit from it. The scary truth is that if you don’t know what you are doing, the modification can actually cost you money.
In 2008, the government did a study on the effects of home affordable modification loans. What they found was scary. Less than 30% of the modification loans reduced the monthly payments by 10% or more. If that wasn’t bad enough, it gets worse. Over 30% of the loans increase the monthly payments leaving the homeowner in a worse position than when they started.
When used properly, the program is designed to reduce payments up to 31% of your gross income. Essentially, the Treasury pays the bank for the amount reduced. Banks are encouraged to participate through other financial incentives, including not having to foreclose on homes with less value than owed.
Since the odds of the modification loan helping are against you, it is advised to seek professional help in obtaining the new loan. The bank is not there to help you. Their advisors are trained to get the bank the most money. Getting advice outside the bank is ideal.
The homeowner must provide the bank all the required documentation. This process can be time consuming and confusing. The bank may ask for information not required and may not ask for information that may help. An outside professional can help the homeowner weed through all the required documentation and help get the best loan possible.
The tedious process should not stop you from getting information. Seeking information from a qualified home affordable modification company may save your home and your budget. The program is only available to you one time. Therefore, you need to get help with the loan to make sure you get the best deal possible.
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