Whilst being approved for a loan modification will relieve some of the stress and pressure on the homeowner, it is by no means the end of the road. During the first few months, payments must be made in full and on time, as the arrangement is still considered temporary until the homeowner has proven they will be able to afford the new repayments. However, the struggle and worry of going through the loan modification process may all be for nothing if the homeowner does not make some changes to their habits and lifestyle in order to keep their repayments on track. Here are some suggestions on improving finances so everything stays on track:
- Make a budget – and stick to it! As a loan modification is a second chance to keep a home, then it is the perfect time to make some changes that will avoid this situation arising again. Think carefully about what must be paid each week/month and ensure this will be covered, as well as saving a little to keep towards emergencies. Sticking to a budget will make things easier in the long term.
- Credit scoring counts – In some cases the homeowner’s credit score may be negatively impacted by the loan modification. It is important that the home owner then takes steps to check their credit score and research how they can improve it.
- Cut out non-essentials – Many of the things we are paying for each month are not essential for us to live our lives. Asses any unnecessary spending and try and find ways to cut it out or reduce it.
- Earn more money – Get creative and find new ways to earn more money. This doesn’t have to mean a second job, there are opportunities out there for those that look!