What is Loan Modification?
A Loan Modification, otherwise known as mortgage modification mortgage loan modification, or home loan modification is the process of modifying your existing loan to make your payments more affordable. The purpose of a loan modification is to provide you with a mortgage payment you can afford. It's actually very similar to a mortgage refinance but instead of finding a new mortgage that you can afford, this just modifies your current mortgage into something you can afford, this just modifies your current mortgage into something you can fit into your budget.
Why Loan Modification?
Loan modification is very helpful to those in times of great financial distress. It offers numerous benefits and can get you out of debt. Some of the primary reasons for a loan modification are to:
- Lower your monthly payments
- Lower your interest rate
- Fix your adjustable rate
- Waive negatively accrued interest
- Grant extensions on payments
- Re-amortize loan to include past due payments
- Save your home
Who Can Use A Home Loan Modification?
It depends on what your current situation is and who your lender is. While most lenders follow the same standards and have the same rules when it comes to loan modification, some do vary. This is why a loan modification consultant is so vital to use. They can easily let you know if you qualify for loan modification. Typically, however, the most common standards include having missed three payments in a row, having experienced a recent financial hardship or change, owning a property and not having filed for bankruptcy. Other factors may come into play, but these are the basic rules you'll need to follow.
What interest rates can I expect after a loan modification?
The results vary from case to case, but most of our clients have gotten interest rates between 2.5% and 5.5%. We have also successfully negotiated on 5/1 I/O and shifted to a 30-year fixed rate mortgage.
Will my lender need other documents (such as credit scores) to assess my application?
Besides the pay stubs and tax forms, some lenders will ask for at least two months of bank statements. But that is strictly to determine your income. Credit scores are never used for qualification.
Do I need to pay for your services in advance?
Yes. You are paying for representation. It works as a retainer, as it does for any service. However, we do offer payment plans.
How do I pay?
You can pay with cash or a cashier's check, MasterCard, or Visa credit cards.
How long does it take to get a response from my lender?
The average wait time is 60-200 days, but it varies from one client to another. Some applications process faster than others.
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