Loan Modification For Dummies

To take advantage of the new financial systems available to amend less than favorable loans, designing a loan modification for dummies strategy is necessary. There are several techniques that may be employed in order to lower monthly mortgage payments to the benefit of homeowners.

  1. Know that you do not need to be behind in loan payments to learn about loan modification. Homeowners may receive assistance prior to going into default, with the only requirement being that the payment is at least 30 days late. Some lenders may even work with a customer who is current. The new federal assistance program does not have a requirement for homeowners to be in default before seeking assistance. Try taking a quiz on a site such as the Making Home Affordable website to see if you qualify as your first step in finding out about loan modification for dummies.
  2. Gather all of your loan information. In order to fill out any application for a loan modification, you will need accurate information about your current loan and your standing with it. Always be honest about what information you are providing. Ensure that you have monthly gross income and recent pay stubs, the most recent tax return, savings and asset information, all mortgages and monthly statements, any home-equity lines of credit, account balances and minimum payments on credit cards and any other debts like student and car loans. Any loan modification plan needs this kind of preparation and organization.
  3. Prepare a letter that describes any hardship circumstances which caused income reduction or increased expenses such as loss of work, illness or divorce. Make sure it is to the point and specific. Be honest with all of the information and ensure that it can be verified. Develop a timeline so that a loan servicer will not have to hunt for information and can easily make a decision. This is an integral part of any loan modification plan.
  4. Determine what kind of help you may need. For example, if you feel you need a professional, consider finding a loan modification firm, attorney or nonprofit housing group. Become familiar with the process by learning about the options available, regardless of whether or not you seek a professional. This is a must for any loan modification strategy. Consider checking with a homeowner advocacy organization such as a HUD-approved counseling agency for information. Watch out for upfront fees, which is usually a sign that a company is not legitimate.
  5. Know your lender and ask for help in getting a modification through them. Find out if your loan is owned by a single bank or multiple lenders. Keep track of all of this information and use it to check with each company for help. Ask for referrals if they are not able to process a modification. Check the Making Home Affordable program website to see about which loan servicers are participating in loan modification programs.
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