If you are having financial difficulties in paying the loan on your property, then you are not alone in this. There are many who are faced with this situation and even fear to have an early foreclosure. However, there is always a way to make things happen and so there is also a way to stop these foreclosures.
If you are in one of those situations where it is do or die a foreclosure, then mortgage or loan modification is the best solution for you.
Knowing what mortgage modification is.
Getting to know all the beneficial aspects of loan modification is necessary if you are ready to take the leap. If you are falling behind or short on your loan be it 6 months, or a year no matter what, you can avail loan modification. When you are ready to take a mortgage modification then your bank will note down the new terms and conditions and modify your mortgage. These terms and conditions can be lowering of your interest rate to as low as 2%, reduction in the principal amount, a 40 year mortgage repayment period, or lowering of your current mortgage monthly payments by half.
So, by far, this seems to be the best option for saving your home. You can avail his loan modification through the Home Affordable Mortgage Program or through your own bank which is often called as in house modification.
How banks deal with loan modification?
While approaching the banks, it is a different scenario. Consider the amount you owe to the bank and the figure that you owe to the bank by amortizing it over 30 years, using today’s interest rate, to this add the escrows. However, this is not your new payment; it is just your qualifying payment, which is to see if you qualify for the loan modification process. Banks can at the most allow only 31% of your income going towards mortgage. So you can consider your qualifying payment and then divide it be 31. This will tell you the amount of money you should be earning each month to qualify for loan modification.
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