Two-Percent Mortgage Modification Under Obama Plan

Has your monthly mortgage loan payment simply gotten out of hand? Are you paying more on your mortgage than you can reasonably afford to each month? Do you struggle to meet other bill payments because your mortgage payment takes up a big part of your income? If so, you may qualify for the two-percent mortgage modification programs that have recently been put into place by the federal government under the Economic Recovery Act of 2009. President Barack Obama has signed legislation that makes it possible to modify the existing mortgage that you have in order to lower your monthly mortgage payment to a more affordable rate – which can help you stave off foreclosure.Halt Foreclosure And Get Current On Payments For Your MortgageBy modification of your mortgage terms, you can qualify for a monthly payment that is more in line with the amount of money that you can afford for your mortgage. The government has set aside money that is earmarked for paying for program costs and to cover any shortfalls that might occur between the mortgage you have and the value of your property.Who Qualifies For Mortgage Modification Under This Bill?The people who qualify for mortgage modification may not even believe that they can qualify, which is why many of them have yet to apply for help. Those who qualify meet the guidelines that the government has set for the program. Number one, you must live in the home that you want to do the mortgage modification on. This home must be your residence, and cannot be a vacation home or rental property that you derive investment income from. You must have experienced a hardship that has caused you to be unable to meet your payments, or to anticipate being unable to meet your payments each month. Your mortgage payment must be at least 31% or more of your total gross income, before taxes in order to qualify for the government-based mortgage modification.Who Processes This Type Of Mortgage Modification?While the government sponsors the program that allows lender to make these mortgage modifications, each individual lender actually processes and approves the modification itself. The government merely provides the money for the lender to do the modification and runs the program.How Do I Apply For Mortgage Modification?You can qualify for mortgage modification if you meet the guidelines above, but you will need to discuss the option with your lender. Your existing mortgage lender can help you fill out the required paperwork in order to qualify for and apply for mortgage modification under the Obama plan.What Are Typical Terms Of This Mortgage Modification?Lenders under this plan will usually limit the interest on your mortgage to 2% and extend your mortgage payments for a longer period of time, which will have the effect of lowering your monthly required payment. The interest rate is a fixed rate that will not go up, unlike the variable rate mortgage that has been so popular over the past decade. Many homeowners opt to extend their mortgage over a period of up to forty years to make their monthly payments more affordable.