Get Started with a Mortgage Modification Program Today!
Are you currently behind on your mortgage payments? Have you by any chance missed one or mortgage repayments and are struggling to meet your monthly financial obligations? If so, you may be able to qualify for a home loan modification. In the current economic climate, seeking a modification on your existing mortgages terms may be your only reasonable option for financial solvency and retaining your home.
People miss mortgage payments and fall behind on their obligations for a number of legitimate reasons. If the hardship that you are facing is genuine and temporary, and if you are able to convince the lender of the same by presenting all the relevant documents, you mortgage can be modified.
If your hardship is such that you can no longer afford the house, it is highly unlikely that a lender will approve you for a loan modification. In addition to your hardship being temporary, you have to also show that you have tried your best to meet your current financial obligations.
Being late on a mortgage is nothing to be ashamed of – it is a fairly common scenario during troubled economic times. What is worse is refusing to get help and being in denial without facing up to difficult circumstance you find yourself in.
Mortgage Loan modification is hardship-based and seeks to reduce principal and/or interest for the existing loan or loans on the property.
A successful mortgage loan modification program can result in the:
- Reduction in principal – The existing principal balance is reduced and the loan amount is changed to a lower value.
- Reduction in interest rate – The existing interest rate is changed to a typically low interest rate to make the payments more affordable.
- Change in terms of payment -The existing loan terms may be changed to a longer duration – for instance, a 30 year loan may be stretched to a 40 year loan to make the payments more affordable.
- Combination of these terms – A combination of any of the three conditions maybe granted to the homeowner.
Steps involved in a Mortgage Loan Modification:
- Application submission – An application for modification is submitted to your mortgage lender. The application may be submitted through a loan modification company or you may apply on your own. It is important to review all the information in the application before submitting it to the mortgage company.
- Lender changes existing terms – The lender will review the application along with the hardship letter and evaluates your eligibility for making changes to your loan terms. Typically, this step involves negotiations between the lender and the loan modification company. The lender may request additional documents including but not limited to proof related to your current income and financial hardship. On successful completion of the negotiations, the lender will put forth new terms and proposes to modify your existing home loan.
- Homeowner agrees to the new terms – The homeowner reviews the new terms set forth by the lender and agrees to the new terms. The home owner will get a date to begin the mortgage payments if he had stopped making the payments due to financial hardship.