Fixed Term Home Loan Modifications
When facing a difficult financial period, it might be hard for you to make your monthly mortgage payments on time. In such a situation, fixed term home loan modifications can be the right solution. This facility, also known as mortgage loan modification, requires the homeowner, in conjunction with the lender, to realign the mortgage loan terms with the homeowner’s current financial status.
A mortgage loan modification usually comes with a set of basic rules and guidelines that the homeowner has to meet in order to qualify for assistance. Some of these terms include loan modification testing, which evaluates how eligible a homeowner is for a loan modification service. This test will guide the lender in knowing which option might be the best for them. However, a negative result will mean that the homeowner does not qualify for the facility; so a foreclosure would be most profitable for the lender.
Another important aspect of negotiation is giving the proof of sufficient income to service the revised loan. Homeowners will have to show proof of their current financial hardship and their source of income. Similarly, a loan modification inspection of the property will be required to establish the value and saleability of the home. This is necessary so that the lender can accurately negotiate new rates and ensure that the house can be resold at a good price in the event of a foreclosure.
Since the law dictates that 31% of a homeowner’s income should be directed to repaying the home loan, a professional loan modification expert should be engaged to help the homeowner make the correct declarations. If a homeowner’s income is unable to meet the 31% threshold, then further negotiation on payment reduction over a specific period of time should be considered. This period and amount can be amended in case the homeowner’s financial situation changes.