If you are one out of the millions of homeowners trying to get your loan modified, chances are you might have heard the term HAMP loan modification in the news recently. Now a lot of us already know what it means to get your home loan modified but what exactly is this new term that people are talking about and more importantly, how does it help you?

To begin with, HAMP stands for Home Affordable Modification Program. It is part of President Obama’s ambitious mortgage stimulus package for American homeowners who are currently struggling to pay their mortgage payment.

Although HAMP was formally announced in March of this year, it is only now that this program has started to gain momentum especially as more and more homeowners are inquiring as to how this program could help them save their homes. Even mortgage lenders and banks seem to be warming up to President Obama’s plans and are much more willing to cooperate with their borrowers to see if they qualify under this package.

The HAMP loan modification program is actually quite significant and is something that homeowners cannot afford to ignore anymore. You can now check if you qualify for a loan modification under the HAMP program and file an application with your mortgage lender to check if they can give you a better interest rate. In some cases, homeowners have been able to get modified interest rates as low as 2% after applying under the HAMP program.

Of course, homeowners should keep in mind that although President Obama announced his mortgage stimulus plan in March 2009, there have been 1.6 million foreclosures since that time. Therefore, if you simply just ask your mortgage lender whether you qualify and try to modify your loan, chances are your application might be denied. It is absolutely essential that homeowners do their homework and research on the HAMP program before submitting their application to their lender.

Banks are very quick to reject any application where they feel the homeowners do not know what they are doing or do not submit the required documents to them which is necessary for the review of the loan modification application. Getting your loan modified under the HAMP program could be quite straightforward but it could also get complicated and overwhelming especially for a homeowner who does not have the right information and guidance on the program. That being said, you don’t need to spend thousands of dollars to someone to handle your loan modification. With the right guidance on what to do and how to submit your application, especially your financial worksheet, you can put yourself in a good position for approval.

Homeowners need to make sure they learn about all the options available under President Obama’s HAMP program and ask the right questions. They need to make sure they understand every aspect of the program. Meanwhile, negotiating is another aspect which many homeowners find themselves in the dark. It is very important to convince a mortgage lender to not only approve a loan modification application but also to offer the best possible interest rate. Hence homeowners need to sit down and properly plan their approach if they are thinking of applying for a HAMP loan modification. Planning and proper execution would definitely be the key difference between rejection and having an application approved with the lowest possible interest rate.