If your default in your mortgage payment, you are at risk of foreclosure like. Now, most people experiences financial challenges due to one reason or another. If you experience challenges paying off the mortgage, then you are eligible for the Bank of America home loan principal reduction program.
This is the program that has been designed to help you in reducing the home loan. Through the program you will be allowed to reduce your outstanding home mortgage loan balance. This means that the bank will regard apart of your principal balance to be interest free.
Note that this program is open to homeowners who have not defaulted on the payments for the last five years. Yes, this means that you need to meet the different requirements of the bank for you to be able to qualify for the modification process.
The bank once it establishes you are eligible they will provide you with different solutions that you can are choosing from. When it comes to the interest rates, the bank can lower the rates to about 2% of the principal loan. You can also get an extension on the repayment period to about 40 years.
To be eligible for the loan, you need to be in a place of hardship. That you when you are making the application. You will need to provide a letter of hardship. In addition to that, you will have to provide documents like utility bills, pay slips and the Insurance policies. These are the documents shall support your request. You need to ensure that the letter is specific to the need for you to get a positive answer.
You need to be careful of the lending institution that you choose. Not all the leading institutions will offer you a transparent loan modification. If you are not cautious, you will end up paying more than you bargained for. You should therefore ensure that you read the fine print of the agreement before you agree to any of the loan modification.
Defaulting on your loan payment can affect your financial records. You therefore need to ensure that you have accessed the principal reduction program to reduce the risks involved.