An increasing number of homeowners are currently seeking a loan modification but not everyone can get one. Many troubled homeowners are simply getting lost in the system and are dangerously close to falling victim to a preventable foreclosure. With assistance from a certified loan modification specialist, distressed homeowners can effectively adjust the terms of their mortgage and avoid foreclosure.
There are many types of loan modifications: lowering payments by lowering the interest rate and/or by stretching out the term of the loan, converting an adjustable interest rate to a fixed interest rate, taking past due payments and adding them on the back end of the loan balance, variable step payment plans, and, in rare cases, reducing the principal balance or any combination of the above.
These 9 tips will help you navigate safely through the process of getting a bank approval for a loan modification.
1. Don't Wait. Act Now!
Falling into foreclosure is a time sensitive situation. If you wait, saving your home will become more difficult. It is imperative you take action right away.
2. Hire a Loan Modification Specialist.
Lenders are knowledgeable and experienced and they hold a significant advantage over the borrower. Their job is to represent THEIR interest. On the other hand, a loan modification specialist's job is to represent YOUR interest.
You wouldn't go to court without an experienced attorney. Why would you go to your lender without an experienced loan modification specialist? This is especially important because your mortgage is probably the biggest financial commitment you will ever carry.
3. Is Your Loan Modification Specialist Licensed by the DRE?
Don't let anyone take advantage of your sensitive financial situation. Make sure that your loan modification specialist is licensed by the Department of Real Estate. Only consider firms that comply with all necessary California Real Estate Laws and the California Foreclosure Consultant Act.
4. Get the Right Documents.
You and your loan specialist will need to decide on a strategy based on your hardship, your needs and your lender's requirements. You will need to provide current income and expense information to document your financial situation.
5. Loan Modification Does Not Impact Your Credit.
One of the most common misconceptions is that executed loan modifications will negatively impact your credit. In fact, being behind on your mortgage payments is what affects your credit rating. Complying with the modified payments will probably be the fastest way to remedy your credit rating.
6. Know Your Loan.
Lenders may give modification priorities to certain types of loans that were previously allocated even if the borrower is current on payments. A seasoned loan modification specialist should be able to identify if you are in a category of preferred loan types.
7. Be Realistic.
Don't have unrealistic expectations. Remember that people tend to exaggerate. Each modification is unique from lender to lender and from investor to investor. Don't expect to pay next to nothing for your loan.
8. Be Thorough.
Based on your current and projected income, make sure that the new modification terms and conditions are something with which you can comply. Be certain to obtain a full financial review from your loan modification specialist that includes a budget for paying your home loan on time.
9. Never Give Up.
If for some reason your loan modification request is denied by the lender, resubmit it. Lenders often change their rules and programs and what might not work out today may work out tomorrow. In addition, consult with your loan modification specialist about alternative foreclosure prevention options. There are other effective ways to avoid falling into foreclosure. Never give up!
No comments:
Post a Comment