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Expense Income Ratio to Qualify for Mortgage Modification

Often used when you’re behind on your payments and facing foreclosure, and when refinancing isn’t an option, a loan modification changes your loan terms to make your monthly payments more affordable. But to qualify for this option, your loan servicer looks at a few expense-to-income ratios to determine if the payment gets reduced enough to meet the loan program’s guidelines. Often, your housing expense and debt-to-income ratios will need to be close to the guidelines that the reduced payment places you within, but some programs offer more flexibility depending on your situation.

Overview of Loan Modification

The loan modification process involves working with your loan servicer to get a reduced interest rate, forbearance of unpaid principal or a longer term. The result is that your new payment ples of these programs include Fannie Mae and Freddie Mac Flex Modification, the Federal Housing Administration – Home Affordable Modification Program, Veterans Affairs Affordable Modification and private programs through loan servicers. Continuar leyendo: “Expense Income Ratio to Qualify for Mortgage Modification” →