The Obama Administration launched the Home Affordable Modification Program in 2009 with federal stimulus dollars. This program offers mortgage lenders and banks financial incentives to lower the monthly payments of homeowners struggling to pay their mortgage bills. The program includes a refinancing section designed to help homeowners refinance their mortgage loans, and take advantage of lower interest rates, even if their residences have decreased in value.
Instructions
1. Determine if you might qualify for the Home Affordable Modification Program refinancing program. You need to own a one- to four-unit home, have an existing mortgage loan guaranteed by either Fannie Mae or Freddie Mac, be current on your mortgage payments and have a first mortgage that does not exceed 125 percent of the appraised value of your home.
2. Call your mortgage lender, using the number on your current mortgage statement, if you think you might qualify. Tell your lender you are interested in refinancing your mortgage loan through the Home Affordable Modification Program.
3. Send by mail or fax the paperwork that your lender will study to approve your refinance. This includes copies of your two most recent paychecks, your most recent federal income tax return, your credit-card statements, statements for other loans you hold and statement for any second mortgage or home equity line of credit you might have.
4. Allow your lender to run a credit check on you. Lenders today rely on credit scores to determine if borrowers are risky or safe. Borrowers with low credit scores, generally under 620, might not qualify for a refinance. If they do, they'll have to pay higher interest rates on their new loan.
5. Give your lender permission to send an appraiser to determine the current value of your home. This will cost you about $400, but lenders need to make sure that the value of your home hasn't dipped so far that the amount you owe on your first mortgage is now more than 125 percent of your home's appraised worth.
6. Set a closing date for the refinance if the appraisal and your financial status allow an underwriter to approve your new loan.
Tags: your home, your lender, Affordable Modification, Affordable Modification Program, Home Affordable
