Due to the global downturn many people are finding themselves in great financial difficulty, the value of their home is now less than the value when they purchased leaving them in negative equity, or they find that their fixed term low interest mortgage periods are coming to an end or are higher than the current low interest rates and need to refinance their current mortgage to survive, only now they find that due to poor credit ratings or a lack of mortgage packages that are now available on the credit markets they are unable to refinance their mortgage.

Traditionally these are the conditions that normally cause thousands of people to start getting behind on their mortgages and losing their homes when the debts are called in by the credit firms and houses are repossessed. To avoid this happening the current government have brought in a homeowner affordability and stability plan, which gives people who had their mortgage finalized before January 1st 2009 the right to possibly modifying your mortgage rather than go through a possibly expensive refinancing.

What the government has done is put pressure on banks to look at a homeowner’s situation on a case by case basis rather than go straight down the road of repossession. What you will need to do is approach your lender with a hardship letter detailing your monthly income and monthly outgoings and they will then determine if you do qualify for a mortgage modification and if you do they will then hopefully arrange a lower monthly payment to avoid foreclosure on your home.