Home Buying

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.

Explained?

Hope to Homeowners will refinance the home based on the current value. 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 reduced loan amount results in a lower montly payment}.

An Example:

Let’s say that your current mortgage balance is $400,000 and your home is now worth $250,000. There are millions of homeowners that find themselves in this scenario. The current mortgage payment is based on the old value of the home. 90% of the home’s current appraised value wil be the new Hope for Homeowners loan. $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.

Will the Payment be Reduced?

The principal reduction of your mortgage is not the only benefit to this program. The H4H loan 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. Even with the same interest rate as your current mortgage. $1,348 would be the payment for the Hope to Homeowners loan. That is a reduction in monthly mortgage payment of $1,050 a month. The benefits are substanital.

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. This program will however help many Americans keep their homes. The H4H program can and will provide some much needed hope to homeowners that are upside down on their mortgage.

If you would like to apply for the H4H program click here. H4H