Some Florida homeowners incorrectly believe that just because they have an expensive mortgage that they will not be able to qualify for a loan modification. However, while the Home Affordable Modification Program is typically for conforming mortgages, the majority of homeowners who actually do receive modifications do so outside of HAMP. In these situations, homeowners work directly with lenders.
If you are a homeowner who is struggling to keep up with mortgage payments — or maybe has already even missed some — keep in mind that for a lender, a foreclosure is costly. Avoiding the costs associated with a foreclosure is often an incentive for the lender to work with you to reduce monthly payments.
When looking at mortgage modifications, the best kind of modifications are either ones that lower interest rates, extend the loan term — or both. These options would allow you to have lower monthly payments.
And while we just mentioned that often homeowners receive modifications outside of HAMP, it is also important to realize that even with a jumbo mortgage, you may still be able to qualify for the government program. The two deciding factors will be how much your mortgage is for, and if the mortgage is guaranteed by Freddie Mac or Fannie Mae.
Aside from having to be guaranteed by Freddie Mac of Fannie Mae, the standard limit for the mortgage value is currently at $417,000. However, in the past that standard limit has gone all the way up to $729,750. Sources also point to the fact that living in a high-value area may be of help when attempting to receive a modification through HAMP.
As you can probably tell by this point, there are a number of options to look at when trying to figure out how to keep your home. Is a modification the best option? Should you try for HAMP, or just work directly with the lender? Or, does refinancing seem like the best option?
In general, these are all questions that many struggling homeowners are asking themselves. However, before just letting yourself get behind on home payments, talk with a qualified expert and see what option makes the most sense for your situation.
Source: NASDAQ, “Getting a Jumbo Mortgage Modification,” Kirk Haverkamp, Dec. 2, 2011