Though the loan modification process seems very tedious and time-consuming, it can be eased through proper guidance. Today’s recession has made many homeowners unable to make their monthly mortgage payments while some are even facing foreclosure. However, this problem can be solved through loan modification. We are going to take a look at how you can modify your home loan.
- You must be living in that house
You must live in the house to modify the loan. Your loan modification application could be rejected if you rent or lease the house. Secondly, loan modification will only be applied to loans in which the monthly payment is over 31% of your monthly income.
- The loan must be up to date
The unpaid principle of the home loan must be less than $729,750 and the loan should be taken on a date before January 1, 2009. Moreover, the mortgage amount should be higher than the present value of the mortgage property. On top of that, the mortgage loan modification firm will require crucial information, like the principle balance on the home loan, the principal ratio, taxes, insurance and interest. In case the information mentioned above will be similar to those of the mortgage lender then you should consider a similar thing.
- What is a mortgage modification loan?
Primarily, mortgage loan modification is not a new load but just an adjustment to someone’s existing mortgage loan. This is important since the terms of the modification will not just reduce your monthly payments but also make them more affordable.
Upon being accepted for a home loan modification, you will need to fill in an application form with the required details, like financial data, bank statement and pay slips. Then you will be able to submit it for processing. In addition, you will be required to write a hardship letter indicating why you are not able to pay your home loan. Make sure you do not indicate situations like divorce, death or injury in the letter. Mortgage loan modification services are only available to people who can prove their financial difficulties.