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.

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The H4H loan is based on the current value of the home for the purposes of refinancing. A Hope 4 Homeowners’ loan will be 90% of the current value of the home. Not all aspects of this program are positive. The Federal Housing Administration (FHA) and your current lender will share in any profits of the house when the homeowner sells their home. This is to offset the balance that has been forgiven. There are enormous savings in the monthly payment because the principal balance has been reduced.

For Example:

Let’s say that your current mortgage balance is $400,000 and your home is now worth $250,000. This is a very common scenario for many homeowners today. You are currently making a mortgage payment on a loan that is much greater than the value of your home. 90% of the home’s current appraised value will be the new Hope for Homeowners loan. This example results in a mortgage balance 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.

The New Payment?

There are benefits beyond the principal reduction in your mortgage. The H4H loan payment will be reduced as well. 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. The interest rate will often be reduced but for this example lets assume that it is not. The H4H payment is $1,348. $1,050 a month is the savings in the mortgage payment. The benefits are quite obvious.

There are some qualifying factors that homeowners need to understand. Every homeowner should do their own research into this program to be sure that it makes sense for your scenario. Negative aspects are involved in this loan. You may give up some of the equity that your home builds when you sell your home. The H4H program allows homeowners to save their home. The H4H program can and will provide some much needed hope to homeowners that are upside down on their mortgage.

The H4H program is available through this company. Hope Four Homeowners