Advice

[Emmo1]

I'm new here and don't know all the lingo so bear with me. We are 2 months behind and just started looking into the loan modification. I am not working anymore, and my husband is self employed- just started this year. When I look at 31% of his income, it's like half our current mortgage payment. Is this too low? Does this mean we won't get approved? Any advice on how to decide what to do???

[heidi79]

Welcome to the forum. Who is on the loan? If you are on the loan alone, there might be a problem with you not working. What have you done so far in the process?

[yomann]

That income is quite low.
Do you have funds in an IRA or 401-K plan that you can tap on a monthly basis to boost your income ?
Can you take in a boarder/roomate to increase household income ?

[Emmo1]

I was worried about that... I think my name is the only one on the loan. Is that really true??
Yes, I have a 401k I suppose.
How much lower do they typically go for? How is it calculated?

We owe 106,000 on our home (original loan was for 110,000)
Our current rate is 6.35
We have a 30 yr fixed mortgage
Tax: 92.30/mo
Insurance: 54.08/mo
PMI: 54.08/mo

What range of income would make this happen??

(We live in OK, so these amounts might seem low to some people in higher cost of living places. lol)

[Emmo1]

I just thought about that point made about me not working and my husband not being on the loan... We CAN technically say it is "our" business... my husband does the service (photographer), but I handle all the secretarial work- client contacts, orders, advertising, etc.

[Emmo1]

Also- re: that question about how far into the process we are: I've called the mortgage company and they said it looks like we meet the requirements to begin the process, told me I needed to give them a profit and loss statement. They said I could look it over and call them back to give it over the phone. So, I'm wondering (with all the little things involved in our income) how to report it- whether I need to find other areas to make our monthly income look better or not. And by HOW MUCH- if at all possible. We have become very frugal with our living right now and can survive with a mortgage that it a little higher than the actual 31% rule. KWIM?

[Emmo1]

Originally Posted by Emmo1

I was worried about that... I think my name is the only one on the loan. Is that really true??
Yes, I have a 401k I suppose.
How much lower do they typically go for? How is it calculated?

We owe 106,000 on our home (original loan was for 110,000)
Our current rate is 6.35
We have a 30 yr fixed mortgage
Tax: 92.30/mo
Insurance: 54.08/mo
PMI: 54.08/mo

What range of income would make this happen??

(We live in OK, so these amounts might seem low to some people in higher cost of living places. lol)

OOPS>>>
Insurance 73.27
PMI 54.08

[Sunbeam]

They can go as low as 2% interest for the life of the loan and extend terms to 40 years. There are some good online mortgage calculators out there...cnn money has one...google cnn money mortgage calculator and you can play with what the payment would come out to.

Your budget needs to be reasonable and you also need to show a small monthly surplus such as $200+ dollars per month if you were at 31%.

Good luck and hope you have success.

[Emmo1]

Thanks, I found a calculator and am wondering-
do they do anything with PMI or insurance? Just trying to find an accurate idea of what to expect.
Also, when looking at the loan- will they consider the original amount of the loan when they calculate the new loan? or the remaining balance?

[heidi79]

The technically, you are self-employed, it is your business too.

[ABC123]

You may want to search this forum for PMI. I have seen several threads where people with PMI were not eligible.

[Emmo1]

Thanks for all your help guys...

So, I've searched and read that PMI is not included when calculating the 31%.?

[Sunbeam]

You are right. PMI is not used in the 31% calculation when being considered for HAMP. BUT your homeowner's insurance and property taxes are.