subject: How to get started with loan modification? [print this page] Author: Realjeff
People go in for loan modification option when there is no financial help available to resolve foreclosure problem. People may have this question in mind as to what is loan modification? Loan modification is nothing but permanent change in a term or several terms in your home loan agreement. Loan is reinstated, resulting in lower monthly payment that you can afford. This option can save you from foreclosure problem in different ways.
Government is aware about the financial problems that U.S. people are facing. To reduce their foreclosure problem, there are certain government plans that will help you obtain loan modification under certain circumstances. Seventy five billion dollars have been set aside to allocate to subsidized lenders who are willing to work with borrowers to modify their loans.
This government plan was set up so that banks can provide financial incentive to stop foreclosure before home is listed for auction. In addition, if people pay their new modified payments on time, they can earn up to $5000 in credit towards loan balance.
Lender will decide whether you can make loan modification on the basis of your ability to make a modified payment currently as well as in future. Lender may ask you proof of income, financial statements with details about income to expense ratio etc. A hardship letter explaining your financial hardship may be needed. Based on these documents you may be decided whether you are eligible for loan modification request. You do not have to already be delinquent on your payments to qualify, as part of the purpose of the government plans is to help borrowers before they fall behind. In the past, lenders would not negotiate with borrowers until they had fallen behind by several months.
Previously if a person has missed payments can also opt for loan modification process. Your missed payments can be added back into your loan modification in a dispersed manner, spreading the missed payments out over the term in order to bring your loan payments current. They can also be added to the back end of the mortgage, so you pay them after the end of the loans current term.
Working on the details about loan modification is not that easy, but can be done by almost any homeowner. What is needed is the right important information to help you fight foreclosure, and getting over a foreclosure without losing your home is a great start to get you down the road to financial freedom.
Loan modification is considered one of the best alternatives to foreclosure if you want to keep your home. It will make your home affordable again and has very little effect on your credit.About the Author:
Jeffadams is an expert author,who is presently working on the site stop foreclosure houses. He has written many articles in various topics like we buy forclosure houses. For more information contact we buy houses for cash.
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