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.
Will this work for me?
The H4H program will use the current appraisal value of the home to determine the new mortgage loan amount. A Hope 4 Homeowners’ loan will be 90% of the current value of the home. Having the balance forgiven may have some negative aspects. 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. Monthly payments are lower due to the principal reduction.
Brief Summary:
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 will be the new Hope for Homeowners loan. This example results in a loan amount of $225,000. 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?
There are benefits beyond the principal reduction in your mortgage. The Hope to Homeowners loan payment will also be reduced. 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. The new payment would be $1,348 under the H4H program. That is $1,050 in monthly savings. The benefits are substantial.
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. Negative aspects are involved in 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 are interested you can find additional information here. H2H
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