Home modification loans can often be the only way that homeowners can stay in their homes. However, lenders can sometimes be resistant to offering a home modification loan unless they believe it is in their best financial interest. To demonstrate this, you will need to follow these steps.
DETERMINE IF YOU ARE ELIGIBLE FOR REFINANCING
Before you seek a home loan modification, you will need to find out if you are eligible for a refinancing. If you are able to refinance your home, you will need to pursue this rather than pursuing a home loan modification.
GATHER TOGETHER FINANCIAL INFORMATION
There are a series of documents that you will need to get together in order to prove that you are capable of paying off your loan after it has been modified. For example, you will need to provide bank statements and evidence that you are employed. You will need mortgage information, which will include your mortgage statement and your loan number.
COMPOSE A HARDSHIP LETTER
You will also need to compose a hardship letter in which you explain the situation that has lead you to be unable to make your mortgage payments on time. Acceptable reasons for needing a loan modification include temporary job loss, illness, the illness of a family member or some other event that is unforeseen and cannot be controlled. Your situation will affect whether you will receive a temporary lowered rate or a permanent lowered rate.
DON’T FORGET ANY REQUESTED DOCUMENTS
When there is a single document they request that was not included, your application will likely be handled much later than all of the other applications. This is a major problem since most banks receive a large number of requests for home loan modifications.
CONSULT WITH A NON-PROFIT
Before you contact your lender, you may want to receive advice from a non-profit housing agent who is with the HUD. In addition to informing you about the options available, they will also provide assistance with coming up with and sticking to a budget. Also, a counselor will be able to look at your situation and will be able to immediately determine what you would qualify for, while you would need to perform a lot more research in order to determine this.
ASK PLENTY OF QUESTIONS
When it is time to communicate with the lender who is responsible for your home loan modification, make sure to ask plenty of questions. Depending on your source of income, how you demonstrate your income can be more complicated. For example, if you are paid monthly, you may need to submit more or fewer paycheck stubs.
STAY IN CONTACT
Make sure to contact the servicer weekly. Determine whether a particular file has been reviewed. By staying in contact, your lender is more likely to expedite your request. It is also less likely that your documents will be forgotten about. Sometimes there are simple misunderstandings that need to be cleared up.
Do not falsify any information on your application or it will be much more likely that your application will be denied. Your credit history will be brought up, so anything that would be on your credit report would be seen by your lenders.
LABEL YOUR DOCUMENTS
Make sure that each document is labeled with your name and loan number. There are a large number of papers submitted to lenders for the sake of loan modifications and the better that you label these papers, the less likely that they will be lost. Each of these steps is essential and will maximize the chances that you will receive a loan modification.