How to lower our mortgage payments?
July 26, 2010 12:31 PM   Subscribe

Does anyone have any tips on getting approved for HAMP (Home Affordable Modification Program) or just tips in general on how to lower our monthly mortgage?

My father has recently fallen ill and my parents income has dropped down to about $2200 a month. Their monthly expenses (including mortgage) is about $4500. My sisters and I are supporting them as much as we can. We would like to lower their mortgage. They currently have an ARM and pay abou $1500 a month. They also have an equity line out where we pay about $700 a month. Selling the house would put us in a loss as the value has decreased. Renting or buying another place is about the same amount monthly. I'm at a loss. Any advice would be greatly appreciated.
posted by lupefiasco to Home & Garden (9 answers total) 2 users marked this as a favorite
I'm not an expert on this by any means, but when we tried to refinance last week we were told that now you need at least 5% equity in the home to be considered. Our house is worth less than we bough it for 5 years ago, so no dice. We did an 80/20 mortgage with the 20% being a line of credit.. The mortgage lady suggested we see if the lender on the 20% would offer us a lower rate to assume that remainder of the mortgage but advised that they are EXTREMELY backed up and might not return my calls for weeks / months. Hope this gives you a few ideas! I'll be watching this thread!
posted by Hellafiles at 1:14 PM on July 26, 2010

Renting or buying another place is about the same amount monthly.

This seems especially important, since it suggests that they'd be no better off even if they could unload their current house. Where do they live now? How far could they move without being too far for comfort from you and your sister? There are many parts of the US where $1500/mo. will buy or rent much more house than 2 people need.
posted by jon1270 at 1:16 PM on July 26, 2010

Response by poster: We live in the DC Metro area which is fairly expensive at is it. It would be difficult to relocate as my mom's business is nearby and she has regular clientele. She also has a home business where we do need the space. Thank you so much for your advice so far!
posted by lupefiasco at 1:24 PM on July 26, 2010

Their mortgage provider probably has a person, if not an entire department, that deals with HAMP issues. Find them and talk to them.
posted by COD at 1:27 PM on July 26, 2010

It will also be useful to know how far underwater they are with the house. One of the HARP eligibility hurdles is that the amount owed on their mortgage is no more than 125% of the home's current market value.
posted by jon1270 at 1:37 PM on July 26, 2010

NACA is at the DC Convention Center through July 30. They work directly with your lender to try to get your mortgage modified.
posted by candyland at 1:41 PM on July 26, 2010

Just call the bank and ask for it. They will do a quick preliminary interview over the phone. If you qualify, then they will send you a packet to fill out with more details. Then they assign a caseworker to you. With my bank, the review process is about a month long. They also have different options, some of which may be better suited to your case than others. They will list what they have and can do.
posted by Vaike at 2:10 PM on July 26, 2010

Are your parents of retirement age? Check with your state to see if there's any sort of property tax relief for seniors - this may lower your payments a bit.
posted by kittyloop at 2:11 PM on July 26, 2010

I and many aquaintances are trying to get mortgage modifications. It seems to be a big shell game to drive you to madness. They have admitted to me that the requirements for paperwork change randomly and you constantly need to send updated info on demand. You also have to call often and will be given a different story from a different person every time. Or maybe that's just a FL. thing. I wish you and your parents all the best of luck. I've been struggling with this for almost 8 months
posted by Redhush at 7:07 PM on July 29, 2010

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