- 1). Get a current copy of your credit report. Mortgage restructures come in a few forms: refinances, temporary hardships and permanent restructures (without refinancing). You'll need to know your credit standing prior to applying for any of these. A free report can be accessed at FreeCreditReport.com.
- 2). Calculate your debt-to-income ratio (DIR). This is the calculation used by lenders to determine your ability to repay the loan. If you have a high DIR, you may qualify for a hardship. A low DIR may qualify you for a better refinance loan. To calculate, divide the total of all monthly bills by your net monthly income. High DIRs are above 50 percent; low DIRs are below 35 percent.
- 3). Review the Virginia's Interest Only PLUS loan. This is an exclusive loan only offered in Virginia. It comes with 100-percent financing (i.e. all of the equity in the home). In addition, if you choose this option, you'll need only pay interest on the loan for the first five years. These loans come on a 35-year term, which will give you further payment relief. You will need a DIR below 50 percent to qualify.
- 4). Contact your Virginia lender if you seek a hardship loan. These programs are proprietary and are not advertised. In addition, they are normally short-term (six months usually) and designed to give you temporary payment relief to get back on your feet.
- 5). Review the existing terms of your mortgage. Virginia law prohibits lenders from charging more that 6 percent in fees on any mortgage loan. This includes closing costs (appraisal, title fee, title insurance, underwriting fee), discount points and origination charges. If the total cost of your fees is more than 6 percent of your total principal loan amount, you can file a claim with the Virginia State Attorney General. The lender will be ordered to restructure your loan, and it may even be rendered void.
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