Many people don’t know how to maximize their chances of getting a mortgage loan modification. Well, this article contains the answer for them.
Currently, mortgage loan modification is what everyone is talking about, right from the media to the loan modification companies. Loan modification tips are being given by them extensively and they stress on the fact that this the best form of avoiding foreclosure. For this reason, the number of individuals opting for loan modification services is increasing day by day. So, what can you do to increase your chances of getting this loan modification option?
Familiarize yourself with the requirements
Firstly, you should make sure you are familiar with what is required of you by the loan modification firm. You should make a call to the loan modification company and ask them the specifics you need to meet in order to qualify for a mortgage modification. After knowing their eligibility criteria, you should evaluate your situation to determine whether it can be termed as hardship or not. A hardship is an unfortunate financial difficulty due to circumstances that are out of your control. These may include unemployment, business closure, accidents, etc.
Fill in the application form accurately
Lastly, you should fill in your application flawlessly. This will entail three main things where the application form comes first. You should read and understand the questions well before answering them. Answer the questions accurately and correctly. The second thing is adding documentation that may include tax returns, bank statements and pay slips. The third thing is the hardship letter. This is deemed as the most challenging part of the loan modification application process. Here is where you have to explain in detail what made you unable to pay your mortgage and what actions you have put in place to get out of that situation.
Homeowners who are in the unfortunate position of losing their homes because they have been unable to keep up with the mortgage payments do have some other options to consider.
This is an option that can be considered when you have been rejected or do not qualify for refinancing. If your life circumstances have changed and you are expecting some hardships in the future where you will not be able to pay the mortgage or you are already defaulting on your payments, there are loan modification firms that specialize to help you in such a situation.
How it works
You approach the lender and negotiate with him to modify the mortgage agreement so that the payments become affordable for you. This is a better option than approaching other lending institutions because your current lender is already aware what your financial situation is and your credit score will not be important for him. A loan modification service can help you renegotiate some of the terms to adjust them so that repayments become more affordable for you.
They will negotiate along the lines of reducing the interest rate and keeping it fixed for a certain period of time so that you can afford the current repayments and hopefully later you will be able to pay more once your financial situation gets better.
There are other ways of saving costs by writing off the penalties that have been levied and the lender might also be able to write off some of the principle amounts. The loan repayment period could be extended to reduce the monthly amounts.
Finally, a loan modification is a good way to save your home with the added advantage that at a later stage, you can sell your home for a profit once there is a boom in the housing market.
Due to the high unemployment rate among homeowners, loan modification is now the option they are looking for. This article describes the pros and cons of this process.
Pros and Cons of the Mortgage Modification
Before visiting your bank or a loan modification company, you need to fully understand the pros and cons of the mortgage modification. A mortgage modification will enable you to extend your loan for a certain period. This will allow you to choose the monthly payment you are most comfortable with. This will prove very helpful to the homeowners who are not capable pf paying the mortgage they had purchased prior to the modification. However, this comes with its own cons, where the bank or loan modification firm will offer a homeowner rate that is a bit higher than the original loan’s rate. Other loan modification services will increase over time, surpassing the national limit.
For your loan modification to be certified, you will need to reapply for the loan to meet the requirements of the loan modification firm. This is a pro in that you will be able to cut down costs due to unemployment or retirement. Its con is that the loan period will be extended, hence giving you a feel of endless payment or even lack of personal possession.
Mortgage Modification Fund
The best part is no matter how long you will be paying for the loan, you will be assured that the home will be passed from generation to generation. Through these programs, the government and banks have formed partnerships with loan modification companies for them to offer more funding for the accepted applicants. This is a pro in that your total mortgage loan balance will be reduced due to the additional funding. However, it is difficult for one to qualify for this fund, as a lot will be taken into consideration including your past misconducts.
Short Sale Contract
A short scale contract is a viable option against a foreclosure. For people facing the foreclosure of their homes, they can always go for this option. In order to make a short sale contract, there are some important clauses which are attached to the contract. It is important to understand the option fully and make use of the advantage which a short sale gives. Loan modification tips are important in this regard and can be gotten from the experienced Loan modification firms to ensure that the best option out of the available options is what a client takes.
When to choose short-sell
Short sales are always a viable option especially when the client choses wholesales. The first clause in a short sale contract is that the contract is strictly between the homeowner and the person who is going to do the outright sale of the property.
Another clause is that the person who wants to draw up a short sale contract and has gotten the current homeowner to sign cannot still advertise the house immediately owing to the fact that he is not sure that the lender i.e. the banks will agree to the wholesale agreement. In this situation, it is wise for the person drawing up such agreement to get a written consent from the banks before he/she begins to market the property for sale.
The inspection period is another clause in short sale contracts. It is usually a period of between 10 to 15 days when the buyer is allowed to look over the house. Firstly, the buyer must be sure that the lenders agree to a short sale. After this the inspection period begins.
A foreclosure is perhaps one of the worst life situations that one can be faced with. It leads to the loss of many homes. Over the last 10 years, around 8 million people have lost their homes in the USA due to foreclosure. This is not shocking considering the fact that lenders are equipped with the best tools and strategies which grant them an upper hand over the borrowers. But it is possible to actually reverse this irrespective of how strong the foreclosure case may be. A few best strategies are mentioned below that you can use to fight back regardless of the seriousness of your foreclosure case.
Find out the right attorney
The most important step to take is find out the best loan modification professional, especially an attorney available in your locality. Failure to take this step can have a significant impact on your success. This is mainly because the attorney is capable of fighting in the best way possible for a client who is facing a foreclosure. Even though lay people may choose to fight against a foreclosure on their own, they may not have the capacity to eventually save their properties from a foreclosure sale. Attorneys are able to win foreclosure cases against mortgage lenders simply because they can identify various flaws that exist within various mortgage agreements. This is the basis for any foreclosure defense, even when a loan modification service has been availed.
Talk to individuals who have been through it all
Another important step worth taking is discuss with some people who have already been through a situation similar to yours. You can use a number of methods to get in touch with these individuals. This can help you reduce the odds of failing to choose the right attorney.
A foreclosure refers to a legal procedure in which the lender (often the mortgage lender) reclaims the homes following a default in the payment of a mortgage loan. Over the years, many homeowners have lost their homes due to foreclosures. If you have never lost a home because of a foreclosure, you may probably find it less important and perhaps not worth giving attention. But this is an important issue that is worth giving a lot of attention. You have to look at the facts associated with it and some of the most notable ones are indicated below:
Foreclosures may lead to an additional loss of property for houses located nearby
Even though there is little that any human being can do to change this, it is a shocking fact. You may be sitting idle at home only to be told that your home’s value has dropped significantly following the foreclosure of your neighbor’s home.
Over 80, 000 new homes are face foreclosure sales on a monthly basis
Though this may sound shocking, it is actually true. Some recent revelations have attested to this information, sending shockwaves all across the US.
Even the best attorney may not prevent a foreclosure
Sometimes, even the best attorneys may not help one save their home from a foreclosure sale. This is shocking considering the fact that attorneys are the best means of winning a foreclosure case.
At least one child in every school in the US is at risk of becoming homeless
This is another fact that is worth giving attention. It also explains why the foreclosure topic affects all people.
Some homeowners do not contend against their foreclosure cases
This is a shocking fact which is in fact true. It calls for the need to urge homeowners to fight against a foreclosure at all costs using any means, such as hiring loan modification attorneys or availing loan modification help of any kind.
Mortgage lenders are interested in reclaiming their funds and ensuring financial security following the end of a mortgage payment time frame. They do this by means of attaching certain terms and condition to the mortgage loan agreement. Borrowers are required to adhere to all the terms and conditions highlighted in the mortgage loan agreement. But this is not always the case. Some borrowers are not able to meet the terms and conditions that have been provided by their lenders.
In each mortgage loan agreement, there are stipulations that all borrowers are supposed to adhere to. But some borrowers default on such stipulations or mortgage loan agreement terms and conditions. In such cases, mortgage loan lenders may resort to a foreclosure so as to reclaim their funds. If you are a homeowner and you are facing a foreclosure, following are some important things you should bear in mind.
A foreclosure can be defended against
Being faced with a foreclosure is certainly daunting. There is nothing more chilling than knowing it is actually possible to defend yourself against something as daunting as this. You can choose to defend yourself against a foreclosure by hiring a loan modification expert or doing it yourself.
The choice of an attorney will determine the outcome of a foreclosure
In case you have chosen to defend yourself against a foreclosure by means of a loan modification attorney, you will have to try by all means to choose the best attorney around. This will have a huge bearing on the outcome of the foreclosure case. The outcome of a foreclosure case often depends on identifying irregularities in the mortgage loan agreement. This is what the attorney does on a frequent basis and tries to prove this in the court.
When a foreclosure notice is given, the homeowner becomes terrified immediately. This is an obvious reaction considering the fact that a house that one has lived in for years is about to be reclaimed by the lender. Even though it is possible to prevent the lenders from reclaiming a home following a foreclosure notice, there is no certainty regarding this. For example, some homeowners may lose a home even after hiring the best loan modification companies. This proves the difficulty of stopping a foreclosure. But it is by far one of the best ways to overturn the tables of a foreclosure into the favor of a homeowner. This explains why most homeowners almost certainly resort to hiring attorneys as often as the need to stop a foreclosure arises.
How to stop a foreclosure?
You can actually stop the foreclosure on your own without even hiring a loan modification lawyer. It is actually true though it may sound unbelievable. Most people do not know this and thus they often end up spending a lot of money on hiring the most expensive attorneys available. You can prevent this by simply following a few foreclosure guidelines indicated in the following passage.
The secrets the attorneys do not want you to know
There are certain secrets that attorneys do not want you to know lest they will lose their clients. In fact, winning a foreclosure is merely all about identifying the anomalies within a specific mortgage loan agreement and using them to defend yourself against the lender in court. Anomalies may include unrecorded payments and failure to account for changes in the interest rates.
When you are a homeowner who has spent several years paying for your home and suddenly you are faced with a foreclosure, you will definitely be devastated to hear such news. Without any doubt, your reaction to such news is not supposed to be surprising. After all, you have been working tirelessly to make sure you own your personal house. Fortunately, being faced with a foreclosure is not the end of the world. This is mainly because there is something that you can do about it. As a matter of fact, you can actually dig yourself out of the pit of a foreclosure irrespective of how deep it may be. Following are some of the considerations you have to make during a foreclosure process.
The costs of a foreclosure process
In case you did not know, the foreclosure is associated with a number of costs. Sometimes the costs may be as high as 30% of the total cost of a home. Both the lender and the borrower may incur huge costs during a foreclosure process. You have to be aware of all this before hiring a loan modification consultant.
Hiring an attorney
When you are faced with a foreclosure, you are at liberty to choose to be represented by a loan modification specialist. Hiring an attorney is advantageous, as it can increase your odds of winning the case by a significant extent. Therefore, it is an important consideration worth thinking about.
Negotiations with the mortgage loan lender
Most people often overlook this process. But it is important and can mean the difference between successfully preventing a foreclosure and allowing it to proceed. Therefore, it has to be accorded the much needed importance that it deserves. The lender can actually understand provided you have valid reasons for failing to make loan payments on time. You can even seek help from an attorney in order to make the negotiations meaningful.
Do you want to purchase a home but you have no idea how to finance the purchase of that home? It is time for you to try mortgage loans. Over the years, these loans have proven to be the best ways to finance the purchase of a home irrespective of how expensive it may be. This is mainly because they are associated with many advantages.
But there are different choices of mortgage loans available today. Each of the choices comes with a number of advantages and disadvantages that you have to bear in mind. Generally, there are two major ways of borrowing money by means of mortgage loan modification companies; including regular mortgage loans (also known as conventional or simply mortgage loans) and remortgage loans. In case you have no idea what each of the two categories of loans refer to, consider the following information.
Conventional mortgage loans
Conventional mortgage loans are the loans primarily meant for financing the purchase of property. These are offered at various interest rates depending on the financial market and several other external factors. Major examples of such loans include tracker, variable and interest-only mortgages.
Remortgaging can refer to a number of things. It may refer to the borrowing of another mortgage (often referred to as repayment mortgaging). This means that the borrower chooses to borrow an extra mortgage loan either for financing the purchase of another house or for paying off an existing mortgage loan. But it can also be for just switching to another lender or loan modification service. The borrower may switch to another lender in order to reduce the repayment cost. This is also known as remortgaging.