Loan Modifications: Make Your Mortgage Payments More Manageable
Loan modifications are changes to your loan agreement that are allowed by mortgage companies. A loan modification is a way for homeowners who have difficulty to stay in their homes and avoid bankruptcy or foreclosure.
A loan modification aids in altering mortgage terms so that the terms can be favorable to the loan borrower. Some of the terms that are altered include: monthly payments, interest rates, and years allowed for repayments.
There are many loan modification programs available. The loan modification programs offer different options and terms; however, all are meant to help homeowners repay their loans in a comfortable manner.
What Are The Qualifications For Loan Modifications?
Any homeowner can request for loan modifications; however, to be eligible for the modifications, you must satisfy the following criteria:
You must give proof that you are unable to make your existing mortgage payments. For you to qualify for the modification, you must give a solid reason why you are unable to make your mortgage payments.
There are many reasons as to why you can be unable to repay your mortgage: maybe you have been laid-off, your business is slow, you have a huge medical bill to clear, or any other reason. You should present the reason to your lender and convince them that you that you can’t repay the loan.
Another criterion that you must satisfy is that you must demonstrate that you are capable of making the modified payments. Before your loan terms are modified, the lender will ask you to make modified payments for 2-3 months. This will serve as trial to confirm that you have the capability of making the mortgage payments that you are proposing to be making.
In addition, you must provide all the documents that will be used to verify that the information that you are giving is true. Some of the documents that you will need to give include: your income report, bank statement, and any other financial document that will give proof that the information that you are giving is true.
Finally, you must keep the home; you should not sell your home.
What Are The Advantages Of Loan Modifications?
The most obvious advantage is that loan modifications allow you to make mortgage payments that you are comfortable with.
Another advantage is that the loan modification will help to stop foreclosure proceedings. Most of the times, when you are going through financial hard times and you can’t repay your mortgage the lending institution will go to court asking you to repay the loan.
Foreclosure damages your credit history and slims down your chances of ever being loaned again. The good news is that, as a result of loan modification, you don’t have to undergo foreclosure. This is because you can sit down with your lender and agree on the amount of money that you are able to pay every month.
Don’t live in fear of eviction or foreclosure. Even if you are going through a financial rough patch and you are behind on your mortgage payments, you are still eligible for loan modifications. Take advantage of them and starve off future problems!