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Whether you are applying directly to your lender or claiming eligibility under HAMP, the practical decisions are all to be made by the lender. You do whatever you can to set out your side of the proposed bargain with a clear set of accounts showing money in and money out. The need is to demonstrate a guaranteed slice of your monthly income that can be devoted to paying a reduced instalment. So list everything you are obliged to pay to keep body and soul together, from food to utilities to transport to health insurance, and so on. Without the modification, this is going to be negative, i.e. on paper, you are spending more than you earn. The “trick” is to show enough to cover a modified instalment, perhaps with a tiny slice of money left over for the inevitable emergencies. If the modified instalment you prove can be paid is enough to keep the lender less unhappy, the modification will be agreed on a trial basis. But if the minimum instalment the lender requires will leave you in negative territory, your offer to modify will be rejected. Why reject a good faith offer? Because people who have to juggle monthly payments to fit into the available money almost always default again. Your income must cover all outgoings.

If the modification is agreed in principle, it moves on to a formal trial basis. In theory, this is a three-month trial, but the reality is that the lenders usually drag their feet and are very slow to convert the trial into a permanent modification. This ought not to affect you. After all, you are paying the agreed amount. But there is a problem. Until the modification is made permanent, the lender will report you to the credit rating agencies as still delinquent. This is grossly unfair. You are paying what is agreed. But, as the law stands, the unpaid balance each month will be reported as late. Thus, the longer the trial period is allowed to drift the worse your credit score will become. This requires action. You should contact the three major agencies, Experian, Equifax and TransUnion, and ask that details of the trial be added to your credit file. That way, even though your score will continue to decline (that is a computer algorithm that stops for no-one), all other lenders will be able to see what is going on. Read the rest of this entry »

The Veterans Administration currently has a program where existing VA mortgage loans can be rewritten with a VA loan refinance. This is designed to help veterans who are paying high monthly rates for their current VA mortgage. Most people, when money is tight, pay their mortgage first, then other bills. This is smart, and if you have done this for the past year, you don’t need to worry about those other bills because there is no credit check with a streamline VA refinance mortgage loan.

With more money every month thanks to low VA streamline refinance rates, you can catch up on those other bills. With a streamlined VA loan refinance, you can skip two monthly payments. This extra money can make a real dent in getting those bills current. Veterans with poor credit can take advantage of low VA streamline refinance rates to catch up on credit card bills and turn their financial troubles around. A VA mortgage refinance loan is perfect for veterans who just need a little extra every month to stay afloat.

Speak with a VA approved lender to see if you qualify for a streamlined VA loan refinance. If not, there are other types of VA loan refinance programs that you may qualify for. Don’t wait until foreclosure loams, the sooner you start the loan process, the sooner you can enjoy lower monthly payments.