I believe I heard that, at the moment, this is only for mortgages owned by Fannie and Freddie. You'd have to check with your mortgage servicer to see who owns your note. It could certainly change to include all banks though, it seems like new legislation is only a day away these days (no political conotation intended at all, it's been that way for the past year or so).
I agree though, I guess I shouldn't have waisted time figuring out payments as a percentage of my income when I bought our house. We could have picked up a much larger place......
They are going to extend this to Ginnie Mae loans as well (FHA & VA)
"I feel sorry for people who don't drink. When they wake up in the morning, that's as good as they're going to feel all day".-Frank Sinatra
A lender would have no grounds to call a note from a borrower in "good standing." Don't default and you are fine. Mortgage advice on message boards is always good for a laugh. I am not singling out this post, there are many others on this and other boards.
You may want to try calling your current lender before you speak to anyone else to check on a MOD program.
Callable/non-callable aside, I think the advice given so far is pretty sound. Of course they will want to check with their current lender, that goes without saying.
Take it from someone who has worked at 2 mortgage companies (Principal and Wells Fargo), write down exactly what they are offering. They are going to want to talk about "out of pocket expenses" instead of total costs. Here are some things I would ask.
Will I need a new appraisal?
PMI-Am I going to have to pay and if so how much?
How much out of pocket?
Here is my current loan amount. What will be my loan amount after I refi and you add in all the charges.
What is the interest rate and points? What is the APR?
Do they require an escrow account? This may not be important to you but it's good to know.
Get the loan counselors name and direct extension and tell them you'll call them back.
After getting all that info I would go to JavaCalc.com and run their mortgage calculators. Like others have said, I would be inclined to go to a 30 year fixed but also keep in mind there are other terms. A lot of people go with a 20 year term instead. It may not get you a much better rate but you will pay so much less in interest.
Other will say to just pay more each month but a lot of people talk this big game and then never do it.
If you can prove you should never have been purchased a home in the 1st place you can get the best deal. Under the details of the United States Treasuryís Making Home Affordable (MHA) Program announced by the Obama Administration yesterday if your PITIA (Principal, Interest, Taxes, Insurance, Association dues) is over 31% of your gross income than you can have your interest rate reduced down to as low as 2% fixed. If you still arenít down to 31% you can have your term stretched out to 40 years. And yes if youíre still not down to 31% itís optional for the lender to forgive some of the principal amount of your mortgage loan. Not only that but if you make on-time payments on your modified mortgage loan then we (the American people) are going to give you $1,000 per year for 5 years just for paying on time your new mortgage which we subsidized. For all of us who originally agreed to the terms and conditions of a mortgage loan we could afford Ė Tough Luck!!!
Do you know if this is for adjusted gross income, or gross income?
I ask because if I max out an IRA, I can qualify for this!
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