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Citigroup Loan Modification – Tips You Need To Know To Qualify

Getting a relief from unaffordable loan payments for homeowners is now possible through a Citigroup loan modification program. Within the next six months, the 500,000 high risk Citigroup borrowers who are current on their payments but are at risk for default may be contacted by Citigroup to discuss a new loan workout program which could provide a more affordable home loan payment scheme. This scheme is geared towards providing a modified loan payment that is equivalent to 40% of the borrowers gross income.

To qualify for the Citigroup loan modification, borrowers should provide documentations detailing their income and expenses to meet the 40% debt ratio requirement. The debt ratio may be obtained using the following formula:

	debt ratio = expenses on the housing / gross monthly income

The expenses include the principal and interest payments, property taxes, insurance and homeowner dues, if applicable. The quotient must be multiplied by 100 to get a value in percent. The new modified payment will be arrived at by Citigroup through:

1. Reducing interest rates

2. Extending loan terms

3. Reducing the loan balance

The Citigroup loan modification will initially be offered to the homeowners located in areas where unemployment is high and home values have sharply declined. These areas include: Florida, Michigan, Arizona, California, Indiana and Ohio. Those borrowers whose credit scores have dropped and have other signs of difficulty may be contacted. All they have to do is to complete a loan modification application form and provide proof of their income and expenses as well. A loan workout solution may be offered depending on the information received from the borrower.

It is so important for a borrower to learn how to complete the Citigroup loan modification in order to increase the chances of being approved. The borrower should know how to fill out financial statements, complete a family budget and calculate the debt ratio as presented earlier.

The borrower must have a clear understanding of the guidelines before calling on the lender. Having this knowledge is so crucial since even the most deserving homeowner may be denied if the paperwork is not completed properly.