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If you answered “yes” to all of the questions, submit the following to the lender:
- Information about the monthly gross household income with pay stubs or other documentation of income.
- Most recent tax return.
- Information about any second mortgage, if any.
- Account balances and minimum payments due on all credit cards.
- Account balances and monthly payments on all of your other debts (car loans, etc)
If you qualify, this program can:
- Reduce your monthly payments to no more than 38% of the borrower’s monthly income, either by reducing mortgage principal or interest rate;
- The program will match dollar for dollar further reductions down to 31% debt to income ratio. Your interest rate could drop to as low as 2%, but your term could be extended to 40 years.
- These payments are in effect for 5 years, at which point the interest rate may increase by 1% per year maximum.
If you do not qualify under this program, you may qualify for the Home Affordable Modification (HAMP)
HOME AFFORDABLE MODIFICATION (HAMP)
Qualifications for HAMP
- Is this your primary residence?
- Do you owe less than $729,750.00?
- Are you having trouble paying your mortgage?
- Did you get the mortgage before January 1, 2009?
- Is the monthly payment for principal, interest, taxes and insurance more than 31% of your current gross income?
If the answer to all of the above is “yes”, call the loan servicer with the following information:
- Information about the monthly gross household income with pay stubs or other documentation of income.
- Your most recent income tax return.
- Information about your savings and other assets.
- Information about your first mortgage and any second mortgage/home equity line of credit on the house.
- Account balances and minimum monthly payments on all credit cards.
- Account balances and monthly payments on all other debts such as car loans and the like.
- A completed Hardship Affidavit describing any circumstances that caused a negative change in income or increased expenses (job loss, divorce, illness, etc.)
Are there tax consequences? This is not tax advice, consult your accountant!
If principal and interest are forgiven, there may be Debt Discharge Income. Consult your accountant for details.
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