If you are offered a loan modification, be sure you know how it will change your monthly payments and the total amount that you will owe in the short-term and the long-term. Loan-to-Value Ratio The Loan-to-Value (LTV) ratio is a measure comparing the amount of your mortgage with the appraised value of the property. The higher your down payment, the lower your LTV ratio. Mortgage lenders may use the LTV in deciding whether to lend to you and to determine if they will require you to acquire private mortgage insurance. Loss Mitigation Loss mitigation refers to the steps mortgage servicers take to work with a mortgage borrower to avoid foreclosure. Loss mitigation refers to a servicer’s responsibility to reduce or “mitigate” the loss to the investor that can come from a foreclosure. Certain loss-mitigation options may help you stay in your home. Other options may help you leave your home without going through foreclosure. Loss mitigation options may include deed-in-lieu of foreclosure, forbearance, repayment plan, short sale, or a loan modification. If you are having trouble making your mortgage payments, or if you have been offered and are considering various loss mitigation options, contact a Department of Housing and Urban Development (HUD)-approved housing counseling agency. You can use the CFPB's "Find a Counselor" tool to get a list of housing counseling agencies in your area that are approved by HUD. You can also call the HOPE™ Hotline, open 24 hours a day, seven days a week, at (888) 995-HOPE (4673). Low Down Payment Loan Programs There are instruments which allow for zero down payment such as USDA and VA. Fannie Mae's Home Ready Program, Conventional 97, Freddie Mac's Home Possible, and Home One
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