Nowadays, bankruptcy is not your last resort. This is because there are now several programs available to help you and one of these is the FHA loan modification being given out by the Federal Housing Administration. This group of people run several programs in order to promote home ownership. Aside from helping out with loans, they also help homeowners purchase their homes through mortgages.
The help this organization gives out is a guarantee that your lender will not have to write off a loan once the borrower defaults. Instead, the FHA will take care of the payments. Because of the guarantee, lenders are more willing to make big mortgage loans. In addition, the loan modification being offered by the FHA will help successful applicants to cut down on their monthly mortgage payments.
Since we are currently affected by the downfall of the economy, getting a refinance program by the FHA will surely be one great help already. If you would like to stay in your home, then you can apply for the program to save your home. As a matter of fact, it is very easy to get a loan modification since most of the paperwork has already been done in the original process of getting your loan.
Because your home under discussion has already been approved for the FHA loan, there is no need to repeat the steps again. The only catch though is that you are only allowed to borrow a similar amount of money as your original loan. To qualify for the program, you will need to meet the pre-qualifications. These include that your current loan should be FHA insured, your existing loan should be in good standing, you should not be late on payments, and that your refinance should be lower than the monthly principal and your interest payments.
Once you can meet the guidelines, then you can be assured that you can apply for the loan modification program of the FHA. It may even be the best option you can rely on during these hard economic times. When you have submitted your application, you are a step closer to getting more financial freedom. With lowered monthly payments, you can now have more money left every month which you can use to pay off those other household expenses. Indeed, if you want to save your home and would not like to go for bankruptcy, the FHA loan modification program is your best way out.