Having identified the Bank of America as your financial savior to help you retain your house, you need to master the guidelines that will increase your chances of qualifying for the loan modification program. Knowing the guidelines is a very important step because it will make the difference between acceptance and denial of your modification application. Normally, there is a standard criterion used to determine who qualifies for the option of the federal HAMP and also for the in-house programs. All you need to do is have this formula at your finger tips and your chances of qualification will be greatly boosted.

When you eventually qualify for a Bank of America loan modification, your modification will be reduced even further, therefore becoming more affordable to pay. The Bank of America will definitely modify your loan if they realize that they will lose less money if they keep the home than if they have to take the home back for foreclosure.

Standard guidelines for approval

This comprises a four-step formula used to determine who is in and who is out in terms of those qualifying for loan modification programs from the bank. You just need to learn this formula and then make sure that your application is in line with the formula. The formula is given below:

The first thing is debt ratio calculation which is basically to calculate the percentage of your gross monthly income that you pay to finance your mortgage.

The second formula involves calculation of target payment and this is based on 31% of your gross monthly income.

The third formula is whereby the method of waterfall modification is employed to discern if your target payment can be achieved.

The last step is that the bank verifies your financial hardship position as you have presented it.

If you adhere to the above guidelines properly and your debts are presented in a proper way, your chances of approval will have been helped a great deal. You will then have saved your home from a possible foreclosure and continue living in it happily with your family.

By Jason Witts