Mortgage Modification - What You Need To Know
With unemployment rates rising to unprecedented levels and the number of foreclosedhomes skyrocketing, mortgage modification seems to be the only reprieve in sight for home owner's trying to save their homes. Even though refinancing is also an option, in this day and age of uncertainty weary lending institutions are demanding nothing less than the prefect credit score. However, even if you have missed one mortgage payment you will not be eligible for refinancing in which case modifying your home loan will be your only option
What is home loan modification?
It essentially implies renegotiating the terms of a loan which may even involve a rate modification in such a way that the monthly mortgage payment is brought down or the borrower may also expect some amount of the loan and/ or penalty to be written off.
Are you Eligible?
To determine your eligibility, you will be asked to submit certain documents that will help the lending institution verify your claims of financial hardship. Any situation that has caused a dramatic reduction in your income may act as the reason to seek mortgage modification. So if you have been through a divorce or if a family member has passed away, these too could qualify as the likely causes to seek mortgage modification. Other reasons can include interest rate reset, work related injury, chronic illness and job loss etc.
The Benefits of Home Loan Modification?
There are several benefits in opting for a mortgage modification; the biggest advantage is of course the fact that you get to retain your home. Also, home loan modification can delay foreclosure while you are getting your finances in order. Some lending institutions give the borrower a choice under their mortgage modification programs where they can either avoid foreclosure or the bank can provide a moratorium to the borrower.
Other advantages associated with home loan modification may include:
-- An extension in the loan term up to 40 years
-- Reduction in the interest rate
-- A possible reduction in the principle balance amount and Partial deferment of the payment.
How should you start the mortgage modification procedure?
The first step should be to educate yourself about the various home loan modification programs available. Once you know about your options get in touch with your mortgage provider. You will need to submit relevant documents with a home loan modification hardship letter to be considered for a mortgage modification.
If you are considering loan modification, you should really look into 60 minute home loan modification. It is a great resource that contains a lot of important information about the process of applying for a mortgage modification. It was created by an expert who has modified numerous home loans. The kit included a professional hardship letter outline, and one on one support in case you have any questions. It is a must have for homeowners.
by: David Pit