There’s a saying that when life gives you lemons, you should make lemonade. Of course, if you didn’t have sugar and water, you would just be stuck with a sour fruit. You need the appropriate tools.
There are lots of reasons you might miss mortgage payments. Maybe you’ve lost your job or maybe an injury has prevented your ability to work. Whatever the case, the thought of late fees and the possibility of losing your house can add higher levels of stress to an already unpleasant situation.
Square One is a Quicken Loans program for people with Fannie Mae and Freddie Mac loans that could help prevent you from going into foreclosure and losing your home. You may see this referred to elsewhere as a streamlined loan modification. Either way, it’s intended to be the sugar and water you need to get back on your feet.
Getting Back to Square One
So how does the program work? It’s pretty simple. If you qualify for this free program based on guidelines we’ll lay out later in this post, your mortgage lender will send you a letter.
This letter explains the goal of the program and lays out your options for lowering your payment by lengthening your term.
In this scenario, any missed mortgage payments and other applicable past due amounts that are part of your loan agreement are added to the remaining balance on the loan. That balance is re-amortized for the term you select and your payment is lowered.
In order to qualify for the Square One program, there are certain conditions that clients have to meet.
Is This for Me?
For Square One to be an option, you must meet each of the following criteria:
- Your loan must be owned by Fannie Mae or Freddie Mac. Not sure? See if your loan is owned by Fannie Mae or Freddie Mac.
- You have to be 90 or more days late in your mortgage payments.
- The mortgage has to be at least a year old.
- You have to complete a three-month trial period to make sure you can handle a new payment. If you miss a payment during this period, your loan will not qualify.
- Your loan cannot have been modified three or more times in the past.
There’s no paperwork involved in this modification. If your loan is modified, we also waive all late charges.
It’s important to note that a loan modification could affect your credit. Creditors may see the fact that you’ve enrolled in a reduced payment plan as a sign that there’s some additional risk involved. If you’re trying to improve your situation, though, the benefit probably outweighs this slight downside.
While this is certainly a helpful option for many clients, it may not be the only one available to you. Be sure to go over all your options with a Home Loan Expert.
We just gave you a lot of information. If you have questions, leave them in the comments and we’ll get back to you.
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