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How will my debt to income ratio affect a loan modification? Do percentages appy when doing a loan modification? How low should I expect the mortgage company to lower my interest rate if it is already 5.535%?

1 Thought on Debt To Income Ratio And Loan Modification?
  1. Reply
    March 12, 2013 at 3:55 am

    In a Making Home Affordable Modification does have rules regarding the debt to income ratio after the loan is modified. If your debt to income is greater than 55% after the modification you will be required to get debt counselling from a HUD certified debt counselor.

    The debt counselling is paid for by HUD so there is no charge to you but you will have to attend several meetings with the counselor and will probably have to read some materials and work out a budget and handlings to lower your debt to income ratio.

    Your loan modification would not be stopped if you did not attend but it is a requirement that you see the HUD certified counselor. I have not seen any government guideline that covers failure to appear for debt counseling, only that you get signed up and scheduled for debt counseling. The debt counselor is only paid after the counseling so I am sure that you will be called by the counselor and reported if you do not.

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