Loan Mod Salient Features

Some of the most important factors that will influence a lender to modify your loan are

1)Establish Financial hardship (a recent or imminent increase in the payment that is likely to create a financial hardship)
2)Current Market Value of your Home
3) Current Gross Household Income
4) Your lender will resort to a combination of sorts to see if they can lower your Principal Interest tax and Insurance (HOA dues if a Condo) to 31% or less of your Gross Household Income.
a ) Reduce Interest rate upto 2 % on a 30 yr loan to reach the 31% target.
b) If a) does not meet the target extend the loan to 40 years to reach the target
c) If a) and b) does not work lender may consider principal forbearance ( Any forbearance will need to be paid at the end of the term)
5) The payment based on 4 a or 4 b or 4 c should meet the Net Present value (NPV)test.The NPV test is based on NPV calculated on current value of property compared to the NPV of the monthly payments based on 4 a or 4 b or 4c.The lender should have a positive NPV based on the payments you will be making and your payments should be less than 31% of the Gross Household Income.

Check you Eligibility by clicking on the Link below