Everyone is well aware of loan modifications and how they are the number one way for a homeowner to avoid foreclosure and stay in there home. But, many homeowners looking for this kind of assistance find the process to be very difficult, frustrating, confusing, and just overall stressful on their daily lives. That’s why it is very important that before you begin this process you are armed with as much information as possible and present your case in a professional matter.
Below we will answer some of the most common questions homeowners have in regards to this process:
Q. What does a loan modification do?
A. Well a loan modification is specialized for homeowners that are currently facing financial difficulties and are struggling to pay their mortgage. This will help the borrower achieve a new loan with a more affordable monthly payment. Or possibly be the key to helping someone avoid foreclosure and remain in their home.
Q. Can you be current on your mortgage and still achieve a modification?
A.Yes it is possible, but is going to be much more difficult then if you were behind. If you are current at the time you apply, your lender may believe that you have no problems paying the mortgage and therefore no need to modify the loan. The only way you can accomplish this while current is if you are barely making it by each month (you must be able to prove this) or possible even in a loan that is due to adjust in the near future.
Q. If you have already missed payments will your lender include the late fees into the modification?
A. Yes, this is actually one of the main purposes for a loan modification. Generally your lender will include any missed payments along with fees to the back of the loan, which will cause your principle to rise. This is very beneficial to borrowers who had temporary struggles and just need to catch up on their payments.
Q. What will lenders accept as a reasonable hardship?
A. There are many financial hardships that your lender will find acceptable. Below are common reasons that borrowers are in need of modifications:
- Military Duties
- Reduced Income
- Unaffordable interest rate adjustment
- Death in family
- Loss of job
- High Medical bills
- Significant damage to Property(such as vandalism or natural disaster)
Q. Can a loan modification help you to avoid foreclosure and stay in your home?
A. Absolutely, this has got to be the main reason homeowners are in need of this type of assistance. Many people out there are in desperate need of help with their financial situation and are at risk of foreclosure. with a loan modification you are working with your lender to find a solution that will help you bring your loan back to current once again and stop the foreclosure proceedings.
Now that you have have some information about modifications, it is now time for you to begin the process yourself. We highly encourage you to join our forum here on Loansafe.org where you will find thousands of homeowners just like yourself in need of assistance.