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. The lower monthly mortgage payment is the result of the program reducing the principal balance of the current mortgage.
How will this work?
The H4H loan is based on the current value of the home for the purposes of refinancing. A Hope 4 Homeowners’ loan will be 90% of the current value of the home. Having the balance forgiven may have some negative aspects. The Federal Housing Administration (FHA) and your current lender will share in any profits of the house when the homeowner sells their home. This is to offset the balance that has been forgiven. Reducing the payment is a result of the principal reduction.
For 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 Hope to Homeowners program will finance a new loan based on 90% of the home value today. This example results in a mortgage balance of $225,000. 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.
Will the Payment be Reduced?
There are benefits beyond the principal reduction in your mortgage. The Hope 4 Homeowners’ mortgage payment will be reduced as well. 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. Let’s just assume that the Hope 4 Homeowners loan has the same interest rate as the current mortgage (all H4H mortgages are 30 year fixed). The new payment would be $1,348 under the H4H program. That is a reduction in monthly mortgage payment of $1,050 a month. The benefits are quite obvious.
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. Realize 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 is helping homeowners find the best way to utilize this program. Bringing Hope to Homeowners
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