When you are looking at a possible foreclosure, the last thing you want is another disingenuous plan of action that results in little to no monetary help for your situation. Luckily, loan modification options do not fall into this category. Before you delve too far into the process of altering your home mortgage, you surely want to grasp as much information about the concept as you can.
What a loan modification is exactly is a permanent alteration to a term or several terms in your home loan agreement. It allows a loan to be reinstated, resulting in a smaller monthly payment you might be able to afford. Obviously, with this basic definition, it is possible to use loan modification to save you from foreclosure in a number of different ways.
The United States government is very aware of all the financial hardships of the country (after all, it caused many of them via the use of the Federal Reserve system). For this reason, they have laid out plans for government programs to help you acquire a loan modification under certain circumstances. Seventy-five billion dollars have been set aside to disburse to subsidized lenders who are willing to Coordinate with borrowers to modify their loans.
This program was designed to give banks a financial incentive to help you stop foreclosure before the home is listed for auction. Also, if you pay your newly modified payments in a timely manner, you will be qualified to earn up to $5000 in credit toward the loan balance.
To find out if you are qualified for a mortgage modification, the first thing your bank will consider is your ability to make a modified payment currently as well as in the future. You must have proof of income and supply financial statements with details elaborating on your income to expense ratio, establishing your monetary incapability of making your current loan payments. A hardship statement explaining your financial hardship is also required.
This statement proves your need for a modification and hopefully your capacity for paying the modified sum should you be granted your request. You do not have to already be behind on your payments to qualify, as part of the purpose of the government plans is to help owners before they fall behind. Previously, most lenders would not negotiate with borrowers until they had fallen delinquent by several months.
Getting started and working out the details concerning your possible loan modification option is not always easy, but can be done by almost any owner. What you need is the correct important information to help you end foreclosure, and getting over a foreclosure without losing your home is a great start to get you down the road to financial liberty.
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