What is Loan Modification and How to Qualify?

Have you been hearing a lot about loan modifications? Do you know what a loan modification is? Is loan modification for you? How can you avail of loan modification?

A Loan Modification is a way to renegotiate your current mortgage with the ultimate goal of placing you into a fixed rate mortgage or reducing your interest rate or monthly payment. In other words, many aspects of your mortgage can be changed to your benefit, including the term of the loan, interest rate, principal balance, and monthly payments. A Loan Modification will change your existing mortgage note and give you a fresh new start in managing your home. Your account will be brought up to date immediately. Most importantly, a loan modification is not reported to the credit agencies and will not have an adverse impact on your credit scores.

Every lender has different criteria of qualifying you for loan modification, but you have a greater chance of success if you meet the following:

• no longer qualifies for a refinancing
• currently in an adjustable rate mortgage (ARM)
• are self employed during tough economic times
• are currently “upside down” (owing more than your home is worth)
• are about to go into foreclosure
• have fallen behind on your mortgage or foresee falling behind on your mortgage due to financial hardship

Will your lender be willing to modify your loan? Absolutely - It is very expensive for them to foreclose your house. With the current economy, your lender would rather work with you and continue to get paid monthly rather than going through the foreclosure process, especially when their core business is not in real estate. But your lender cannot make any adjustment or modification on your loan agreement without you taking the initiative of requesting for it.

The key to a successful modification focus on your willingness, you must be willing. Willing to work things out with your lender, willing to continue your payment diligently, willing to take the necessary steps to ensure a successful modification, and most importantly willing to take immediate action.

The most important factor to determine if your loan modification will be successful is to take immediate action. Many homeowners don't qualify for a loan modification because they have waited too long to act. So take charge of your situation by contacting us today.