What Will My Payment Be? / Projected Payments
Many of our clients have been asking about projected payments. “How much will I be paying if I am approved for a Loan Mod?”. Here is what we can tell you. While only the “Investor” (Owner) of your loan can make the Loan Modification final offer, we can tell you from experience that the typical criteria for THE TOTAL HOUSE PAYMENT (principal, interest, tax, insurance, HOA) is 31-38% of gross income, or 38-42% of Net Income (your net pay after taxes). ALSO…there are some limiting factors. YOUR OTHER DEBT/LARGE CONSUMER DEBT LOAD: If you have other consumer debt that, combined with your new mortgage payment, will exceed 65-75% of your gross income, the likelihood of the Investor/Owner of your loan “Approving” a loan modification goes down. WHY? Because, the owner of the loan is concerned that these other debts will prevent you from paying consistently on the new loan terms, AND (in some cases), these other creditors may place liens on your home and/or garnishments against your paycheck. FINAL SAVIOR FOR FOLKS WITH LARGE CONSUMER DEBT: If the Lender is facing a huge loss on the sale of your home…if they are upside down 20% or more in a foreclosure situation, we have seen many loan modification approvals to 1-2% for 5 Years, converting back to 5.0 – 5.5% for the life of the loan. WHY? Because the loss to the bank was going to be SO severe, they would rather give it a shot with our Borrower, based on how well their hardship letter was written, and upon the quality of the Business Case Proposals being made to the Investor/Owner of the loan. HUMAN FACTOR: At the point that the Loan Modification Request gets past the initial screeners, it makes it to the desk of a “Negotiator” or “Specialist”. These folks really do read the Hardship Letter, Proposal, and Lender Cost-Benefit Analysis that we prepare at Ferguson Financial / 1st Financial Nationwide. If you have limiting factors, there are ways to counter-balance their risks to the Lender, and we guide our Borrowers through this process. We also make sure to disclose your risks and potential success factors in the process. For more information, contact us at (866) 968-9685 or www.yourloanmodifications.com and we will be happy to explain more.
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