Loan modifications are not a new option for homeowners facing financial uncertainty; many were unaware that it was a suitable option for them. There are a number of companies who can help and provide advice about the process before contacting a company, it’s best to have an understanding of the basic steps of loan modification.
Reasons for Loan Modification
There are many reasons homeowners may seek a modification to their loan. Some of the most common reasons include:
- They are facing foreclosure and could lose their home.
- They want a reduction in mortgage repayments.
- They are behind with their mortgage payments.
- They would like a lower interest rate to make repayment easier.
The Process of Loan Modification
Firstly, the homeowner must approach a company and find out whether they are willing to lend them the money. This is most commonly done through the current mortgage broker, although there are other companies and federal programmes to help and provide information.
It is important to note that there is no guarantee a loan modification will be approved. It may be beneficial to get in contact with a loan modification attorney. They understand the process and can ensure no mistakes are made which puts the future of the homeowner’s position in jeopardy.
Possibilities with Loan Modification
Due to the unique circumstances of each homeowner’s position, there are a number of possibilities when it comes to loan modification:
- If they are behind, they may need lower payments and the missed payments added to the back of the mortgage
- If already at foreclosure, homeowners may need more assistance to keep their home
- If the homeowner is not behind and simply looking for lower monthly repayments or a lower interest rate may get help easier than those who have already fallen behind.