A loan modification is a method used to make the home loan more affordable for the homeowners. It’s a restructuring method that is used to change the mortgage payment of the home loan availed. In this case, the term payment is modified to make this happen by a loan modification specialist.
Loan modification options:
The first option is to reduce the interest rate of the loan amount. The next one is changing the variable interest rate to a fixed one. And the last option is to extend the term interest payment.
Calculating a Loan Modification:
HAMP or Home Affordable Modification Program helps calculate a home loan modification. It can convert your monthly mortgage to 31% of the gross monthly salary. This calculation is done with the first mortgage amount of your home loan. Based on where you’re located, the eligibility criteria change. Check your eligibility online with a loan modification consultant to stop the foreclosure of your home loan.
It is important for HAMP to have NPV or Net Present Value test that decides who is eligible for a home loan modification. It’s a bit tricky since only the bank can decide who will get the HAMP. So the best option to get the advice is availing it from a loan modification professional. Even though there are so many online calculators, they cannot be trusted for loan modifications.
To calculate a loan modification, the following documents are required:
- Financial statement,
- income proof,
- current tax returns document,
- bank statement and
- hardship letter.
The forbearance agreement can also help stop the mortgage payments. It allows the borrower not to pay for the mortgage for a fixed period mentioned in the agreement. There are also repayment plans that allow you to pay mortgages when your finances are reequipped.