How to Refinance a Mortgage through the Government

This article lists several steps for you to follow if you want to take advantage of the government assistance program that is available for homeowner’s in distress with their mortgage payments. If the recent crisis in the industry has caused the value of your home to decrease, you will have less equity in the property. You will have trouble qualifying for a refinance loan if you do not have the requisite equity needed to obtain a new loan. Most lenders will stipulate that the percentage of ownership in the property be at or above 20%. If you can qualify for the government assistance program, this will give you an option of lowering your mortgage payments through a refinance loan that has a lower interest rate than your existing mortgage. The steps listed are moderately challenging. You need to find some information before we begin. Look for the following documents that have the information you need:

• The latest copy of your mortgage statement
• Last year’s income tax return
• Statements on your debt that show the balance and payment amounts
• Copy your last two job earnings statements
• Credit card statements with balance and payment information

Step 1: You will need computer access for this step. Get online and find the website MakingHomeAffordable.gov. Read through the conditions listed for the assistance program ‘Home Affordable Modification Program’ on this web page. There is a checklist on the site that can be used to determine your eligibility. Find the link labeled ‘Refinancing’. Fill in the information on the worksheet to see if you qualify.

Step 2: If you find that you are qualified to participate in the assistance program then you will need to look at the copies of the information that you gathered before starting with step 1. Sort the documents into a stack for the debt and a stack for the income.

Step 3: Start by calling your mortgage lender to find out if they participate in the ‘Home Affordable Refinance’ program. If so, ask for an application to begin the process. If you call the number listed on your mortgage statement and find that your lender is not a participant in the program ask for a referral to a lender who is participating. If you want to stay with the same lender your mortgage company can assist you with the process without being a participant in the program.

Step 4: Your lender will ask why you need to refinance your note. You will need to explain why you are struggling to make the payments. It could be you had a recent illness that you must now pay on the bills associated with the illness. You may have lost your job or taken another job that pays less.

Step 5: Your lender will send you an application to fill out. After you have filled it in completely and honestly, the return it to your lender. You can fax, email, or mail depending on the instructions from the lender. At any rate, keep a copy of proof that you have sent the documents and that the lender received them. A fax confirmation sheet, a copy of the sent email, or a return receipt requested card from the mail service. Your lender will take from 30 to 60 days to review your application and verify the documents that you included accurately reflect your income and debt financial picture. When the lender is satisfied that you are qualified for the assistance program he will contact you with the approval. You will need to set a mutually agreed upon time to sign the new loan paperwork.

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