As a homeowner, you are probably familiar with the term “mortgage modification loan.” But do you really understand exactly what that means and how it could affect you? Modification loans are what many homeowners turn to when financial difficulties arise, making it difficult to make the necessary payments on their mortgage.
Although it can be confusing, this is not really a loan. It is simply a modification to your current mortgage loan and payments. This is simply a change in the terms of the loan you got when you originally bought your home. Hopefully this can help you achieve smaller and more affordable monthly payments. Your attention is probably more piqued now with the idea of modifying your loan. Could your lender be able to offer you a loan modification? To find out whether or not you qualify for a mortgage modification, talk to your lender’s loss mitigation specialists.
Each mortgage company has its own set of loan modification criteria. Often things like the loan origination date, the amount of the home’s principal balance, as well as the ratio of principal, interest, taxes and insurance (PITI) to your gross monthly income They are part of that equation. If you meet the required points, you may be considered for a loan adjustment.
If you are eligible, your next course of action would be to formally request your loan modification. Request an application from your lender and submit it including the necessary financial data. Be prepared to submit documents such as income verification, tax returns, and other statements. A difficulty letter must also be included. In a few pages, carefully explain what happened that caused this financial hardship and prevented you from paying your mortgage as is. It is important to cite in detail specific events or causes, such as illness or termination of employment, of your current position.
A mortgage modification loan doesn’t have to be daunting or even very difficult. By talking to your bank’s loan officer and submitting a few simple facts, you could ease your financial burden without having to worry about losing your home.
