As a homeowner, you may not have much of an interest in finance, risk vs return, loss mitigation, loan modification, or the like. That is until you ran into mortgage trouble. Many homeowners amidst financial hardship are now applying for the Obama loan modification program. This requires that homeowners submit many financial documents including a monthly budget.
Homeowners often need help creating a budget for HAMP. This is a resource that discusses your home budget in respect to the Obama loan modification program. It was created specifically for those who need to create and submit a budget for the Obama modification program known as the Home Affordable Modification Program.
Before you get started you should make sure that you are familiar with the details of HAMP, including the qualifications for HAMP. It’s also probably not a bad idea to take a look at all the many Obama mortgage assistance programs offered as help for homeowners who need a way to make home affordable.
Also make sure that you have the HAMP Application if you are not currently in the HAMP trial period yet. If you have already filled out the HAMP application or as it is also referred to the Home Affordable Hardship Affidavit than you should use the format provided by your lender if any or simply get another copy of the application and reference the budget portion.
Many homeowners want to simply know how to get approved for the Obama loan modification in regards to their monthly budget. Though a homeowner is able to “fudge” some figures on the initial HAMP application easily enough, the same can not be said for the final HAMP approval. Many homeowners did not fully understand the risk of applying for HAMP nor the HAMP trial period. We strongly urge homeowners to fully read and understand the trial process as well as the homeowner risk taken on by applying for HAMP.
We understand the desire to send in a budget that is “optimized” for the desired results. There is nothing wrong with putting your best foot forward. However, that in no way implies that it is a good idea to submit fraudulent, inaccurate, false, or bogus information of any kind.
Remember that you are going to have to have legitimate proof that backs up all the figures you submit.
Your Budget and HAMP
The modified mortgage payment target for the Obama modification program is 31% of your gross income (not the take home portion of your income but before taxes are taken out). If you are not sure how much your before tax income is than we suggest you reference our resource that tackles the issue. That page helps you calculate gross monthly income for HAMP from take home income. There is no real reason in moving forward until you have a reasonably accurate figure for your gross income.
Please continue if you have an accurate figure for your gross income.
As mentioned the modified payment target is 31% of your gross income.
Right off the bat you should be able to tell (if you have a budget) if the Obama mortgage modification assistance program is going to be of any benefit to you.
This implies that if your current mortgage payment is 31% or less than your before tax income then the Obama loan modification program is not going to do a whole lot for you.
Mortgage payments in the range of 33% – 43% of income will probably do best. This is just our speculative guess. keep in mind if your existing mortgage has outrageous interest rates, term that is just for 15 years, or some other uncommon variable than that range does not pertain to you.
Also keep in mind that there is no magic figure. The ultimate HAMP approval decision is based on a NPV calculation.
If you fall into the scenario where this program won’t work you should work towards a repayment plan, forbearance, refinance, or other foreclosure alternative that allow you to keep your home. If your mortgage payment is 31% or less than your current income than as far as the US government is concerned you need to scale back your monthly expenses and maybe improve upon your current debt management practices.
If that’s the case we can help. You are off to a great start just by the research you are doing by visiting this finance blog. Keep at it and you will be on healthy financial ground before you know it.