If you are among the many who are struggling with their current home loan set up, then you might need to know a little something about loan modification. A lot has been made about these programs in the media, and those who are going to take advantage of them will need a solid understanding prior to putting in an application. The modification process does offer relief to many people, but it’s not for everyone. Knowing whether or not you qualify is the first step.
How do I qualify for loan modification?
Today’s modification programs are primarily intended to help those people with serious financial hardship issues. In order to qualify for this type of exception, you will need to show that you have either become disabled, lost your job, suffered some sort of serious family trauma, seen your home value dip below the amount that you owe, or some other piece of established criterion.
How are applications handled?
Know that the application process is highly individualized, so they will take a look at your situation specifically. This means that it’s important to state your case and to state it well. There is no guarantee that you will be approved for modification, but if you have a legitimate claim of hardship and your application is completed the right way, chances are quite good.
What kind of assistance is available?
Depending upon which lender you are working with and what your situation happens to be, your solution might be different from someone else. Some home owners will run into a situation where their interest rates are chopped down either permanently or for a short time. Some home owners might see their loan term extended for an additional five years. The best solution is having some of your principal loan amount forgiven by the lender. This solution does not happen all that often, though, so you will more than likely be looking at one of the other scenarios.
What is the ultimate goal of modification?
The modification programs are operated with the intention of helping people get their loans under control. They are designed to bring down monthly payment amounts to levels that are reasonable. Basically, they bring the loan up to date with the realities of your situation. If you can’t pay, then foreclosure is in your future, so modification is a way of staving off that disaster and helping you retain your home.
By Martin Fisher