There are many reasons why people get turned down when applying for a loan modification on their mortgaged homes. One of those reasons is their inability to follow the right steps and fulfill the requirements. Most loan modification processes follow similar procedures and so it’s not a difficult task to complete the process. Once the necessary steps are followed, your chances of getting approved for a modified loan will be very high. Below are the basic steps to follow when seeking loan modification.
Consult a housing counselor
If you don’t know the requirements and processes needed to get your loan modification application approved, the best thing to do is to consult a mortgage expert who will put you through. They will advice you on the documents needed to get you prepared for what’s ahead. Remember that when contacting a loan modification consultant, it’s important to do a proper research and select one with good reputation. There are lots of scammers out there and in this financially difficult situation, it’ll be better to spend your money wisely. But if you are quite familiar with the requirements of loan modification options, there won’t be any need to consult an expert.
Meet your mortgage company/lender
Once you have applied for a loan modification, your lender will require some documents to verify your credibility for the new loan. For your loan to be approved, there should be documented evidence proving that you have suffered from financial hardship, which has affected your commitments towards payments for the current loan. After all the documents have been submitted, the company’s underwriter will review all the documents and files to make sure the borrower will meet up with the new payment plan if approved. This review process can take several weeks, depending on the financial situation of the borrower. Sometimes, the underwriter may require additional documents to conclude their review.
Your loan modification is either approved or declined
Once the review is concluded, the application will be either accepted or rejected. If the application is approved, the mortgage company will issue an approval letter to the borrower, indicating the terms and payment schedule for the new loan plan. This is where you have to either accept the restructured loan plan or decline if it doesn’t favor you.
Overall, the loan modification process is straightforward and can be done by anyone. Just provide the required documents on time, and you’ll be in a better position to get an approval in record time.