The economic pinch is fast becoming a bite these days and more and more people are facing foreclosure. Getting things right in terms of loan modification qualification is becoming increasingly important and in this short article, I'll outline the three absolutely important things to consider when making an application. As you know, the Home Affordable Modification Program (HAMP) enacted under President Obama prescribes financial help to any American who is facing financial difficulties and are at risk of losing their home. Qualification under HAMP is not automatic however, so here are the three things to get right…

The Basic Home loan modification qualifications : 1. The mortgage modification you are applying for needs to be for your primary place of residence. You may only qualify for a mortgage modification on your primary place of residence. All others such as a vacation home, a time share, or a summer home are NOT allowed for this program. This was put into effect to help those who need to adjust the current loan contract that is on the home that they reside in all the time. It is also possible that if you do own a 2nd home or any other property of value, you will not be approved for the program.

Here are the 3 Steps to Calculate your Loan Modification Debt Ratio: Complete your Current Financial Statement form detailing all of your gross monthly household earnings and your monthly housing expenses. This includes your house payment (first lien only, not any second mortgage you may have-that is a separate calculation) monthly property tax amount, monthly homeowners insurance and any HOA dues. You can take your annual property tax bill and annual homeowners insurance premium and divide it by 12 to arrive at the monthly figure.

The information that is required may vary depending on your bank or financial institution. Some require more and some require less. It all depends on their set of rules that they follow. Do not take this personally. They are not out to get you. Remember, you are their customer. Financial institutions receive government funded payments for signing up customers into this program so don't be afraid to do your homework and check out a few different financial institutions before signing with one. The fees associated as stated above could be less at one than at another or you may get a lower rate with one that would even out the other fees. Take your time in deciding and don't rush into anything.

This is a more complicated formula, so you may want to use a loan mod software program to help you with this part. This helpful tool will calculate all the figures for you automatically and show you immediately if you are passing standard approval guidelines for loan modification approval. Having all this valuable information ahead of time will give you a big jump start on getting your loan mod approved because you will know just how to prepare your application correctly.

Learn more about Obama Mortgage Relief Plan Qualifications.