If Refinancing Is Not Option – Try Loan Modification
Desperate times call for desperate measures, right? If you are desperately trying to make ends meet because of a salary decrease and the potential of being laid off, you are probably desperately trying to keep up with your mortgage payments. With interest rates at historic lows, many people are considering refinancing at a fixed, lower interest rate. However, in many situations, the current value of the home is significantly lower than the remaining balance of the homeowner’s mortgage. In cases such as these, the lending institutions will not refinance the mortgage. However, a loan modification is a possibility if refinancing is not an option for you.
A loan modification occurs when the lender of your mortgage changes the mortgage terms so that your monthly mortgage payment is lowered. The hope is that the lower monthly payment will help you avoid foreclosing on your home. With the current administration’s Homeowner Affordability and Stability Plan, the government is working with banks to help homeowners in this difficult economic climate.
Because every individual’s financial situation is different, banks have to evaluate homeowner situations on a case-by-case basis to determine whether or not they qualify for a loan modification. Before contacting your lender, it is important to know the details of your monthly expenses as compared to your monthly income. Once you know the details of your financial status contact your mortgage lender and inquire about a mortgage modification. They will likely require you to write a hardship letter that explains your situation in detail. It is important to include employment status, debt level, dependent numbers, and payoff plan details in the letter.
Mortgage modification is a more viable option than refinancing for many people carrying mortgages in the current home value and employment climate. If your mortgage was finalized prior to January 1, 2009 and refinancing at a lower interest rate does not seem to be an option, you just may be eligible for a mortgage modification.
Loan modification is a viable option for many homeowners, but there are pitfalls that homeowners fall into when applying. Small mistakes in your application might be the reason your lender will reject you. The best way to combat this is by getting a do it yourself loan modification kit.
One popular kit that gets results is 60 Minute Loan Modification The kit includes everything that you will need in order to modify your home loan, such as a professional hardship outline, contact information of all the major lenders, and many more tips and tricks. The Kit is a must have for struggling homeowners.
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Tags: Loan, Modification, Option, Refinancing
