Will You Qualify for a Loan Modification to Save Your Home?

Will You Qualify for a Loan Mod?

When you’re beginning your research into whether or not your loan can be modified, it’s very hard to get anyone to let you inside the numbers at the bank. But without out some help, you could waste a bunch of time and energy…and your family’s hope…trying to secure a modification you’ll never get.

So here’s what we’ve found out…you can use this as a guide to help see if you will qualify or not.

Calculating what your monthly mortgage payment would be including your homeowner’s insurance and taxes if you were only paying 5.00% fixed interest rate for 30 years.
Determine if you can afford to make that payment?

If so, you may qualify for a loan modification.

WARNING: This is only for a general qualifying exercise only; do not expect this rate or payment! If the payment at 5.00% is just too high, then you may not be an appropriate candidate for a modification. In addition, this quick qualification does not take in to account the possibility of a principle reduction or interest rates that may be obtainable at less than 5.00%.

The Homeowner Affordability Modification Program (HAMP) allows your interest rate to drop as low as 2% rather than 5%. But I wouldn’t recommend using the 2% number in your calculations because you have to meet very stringent requirements to go down that low.

And, honestly, it’s probably not in your lender’s interest to let your payment drop that far…which means they’re unlikely to approve a modification that low.