The Hope 4 Homeowners (H4H) program is aimed at helping homeowners that have found themselves owing more on their mortgage than their home is worth. This program can actually reduce the amount that a homeowner owes on their mortgage which leads to a lower monthly mortgage payment.
So How Does it Work?
The H4H program will use the current appraisal value of the home to determine the new mortgage loan amount. A Hope 4 Homeowners’ loan will be 90% of the current value of the home. The forgiven balance can negatively affect the future equity in the home. The Federal Housing Administration (FHA) and your current lender will share in any profits of the house when the homeowner sells their home. This offsets the balance that has been forgiven. The result of the principal reduction is a new lower payment.
An Example:
Let’s say that your current mortgage balance is $400,000 and your home is now worth $250,000. Many homeowners find themselves in this scenario. The current mortgage payment is based on the old value of the home. The new loan is financed at 90% Loan to value of the home’s value based on a current appraisal. $225,000 is the new loan mortgage balance in this scenario. That is a reduction of $175,000 in the principal balance of your mortgage. The new mortgage payment will be based on this new loan amount of $175,000.
What will the New Payment Be?
There are benefits beyond the principal reduction in your mortgage. The Hope to Homeowners loan payment will also be reduced. Let’s say the current mortgage is $400,000 at 6% on a 30 year fixed (the benefits are even greater if you are in an adjustable rate mortgage). The current payment is $2,398. Assuming that the H4H loan has the same interest rate. Payments for the Hope for Homeowners loan for this example are $1,348. That is $1,050 in monthly savings. There are obvious benefits.
There are some qualifying factors that homeowners need to understand. Now that you understand the benefits of the Hope 4 Homeowners program it is time to do a bit more research and find out if you can qualify for this program. Keep in mind that there are some negative aspects of this loan. You may give up some of the equity that your home builds when you sell your home. Americans will be able to keep their homes with this program. The H4H program can and will provide some much needed hope to homeowners that are upside down on their mortgage.
This company can help you find out more. Hope To Homeowners