If you have gotten to the stage where you are no longer in a position to pay your full mortgage on a monthly basis, you are probably feeling quite bleak. You might be worrying about losing your home but do not despair just yet – there is another option. The lenders are not in the property business, and they would rather find a way to help you to be able to afford the installment than to have to repossess and sell your home. You may just qualify for loan modification.
There are different conditions in place with each lender and every new case is judged in terms of the circumstances at the time but, if your application is successful, you will have a reduction in the rate paid and your arrears will be tacked onto the end of the term as a balloon payment. This, however, is not considered great for the lender so you have to be able to prove that the only alternative is foreclosure or default.
When you can apply will also depend on the lender. Check with yours before you default to be on the safe side. Getting there before the loan is in arrears and you have an increased number of options available to you anyway. Your lender will be able to sit with you and come up with a plan that works for both of you. They will look at the amount of disposable income available to you, and what debt you have to determine what is affordable.
You will have to lay out the problem in writing – this is actually a good thing and avoids a “He said, she said” situation developing further down the line. You need to convince them in this letter that you are a good candidate and why you need help. You will also need to provide documentary evidence. You need to set out what the problem is and how you see it progressing. Make use of this mortgage rate calculator Lacve.com today.
Some people think that this is a good way to get a better interest rate – they are generally caught out by the lender. As a result of some people trying to buck the system, there are quite a few hoops that you will have to jump through to convince them to assist you. You will also need to prove that you are working on correcting the issue – you need to cut back on expenses, make attempts at getting a better paying job, etc. Work with the lender to see what you can do. Perhaps loan modification is not available to you – find out from them what options are available and be open to getting advice.