When homeowners desire lower interest rates or new loan terms, they often have their sights set on a refinance. If you are considering a refinance, it is only fair that you are aware of your alternatives. A modification to your loan could save you the trouble of processing a new loan and the high fees associated. A modification is available through private lenders, but if you qualify, the government's (HAMP) Home Affordable Modification Program is the most beneficial option. Homeowners can modify their loan at no cost, while significantly reducing the interest rate.
Essentially, the federal government created the HAMP program in order to aid homeowners who are at risk of foreclosure. HAMP does this by subsidizing lender modifications to borrower home mortgages. In order to qualify for a HAMP modification, you must satisfy the following requirements:
Lenders will require documentation regarding income, outstanding debt, assets and evidence of financial hardship before granting borrowers a preliminary and permanent loan modification. On average, you can save approximately $500 monthly through a HAMP modification.
The Home Affordability Refinance Program was designed to provide financial relief for underwater homeowners, who owe more than their home’s value as a result of the burst of the housing market bubble. Through this program, these formerly ineligible borrowers can secure refinance loans to capitalize on the exceptionally low mortgage rates that are currently available. Unlike the HAMP program, HARP does not require you to be at risk of foreclosure or experiencing financial hardship; rather, to qualify for HARP, you must satisfy the following HARP requirements:
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