In these trying economic times home owners are finding it increasingly difficult to meet their monthly mortgage payment. Rampant unemployment and increasing interest rates has led to an astounding number of foreclosures in the country. Despite all their efforts, home owners cannot make their payments and finally accept foreclosure as an imminent fate or resort to selling their homes. There are two ways for homeowners to save their home one is refinancing and the other is home loan modification.
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The problem with refinancing
Unfortunately, most lending establishments are demanding near perfect credit rating for refinancing which is almost impossible to achieve under the present circumstances. Another problem is that if you are more than 30 days late in making your mortgage payment it automatically affects your credit score rendering you ineligible for refinancing. On the other hand when you opt for home loan modification your credit score does not come into the picture at all.
What is home loan modification?
Home loan adjustments essentially involved renegotiating the terms of your loan with the lending institution. You are doing this because you obviously cannot make the current monthly mortgage payments, however you believe that you will be able to pay if the amount is brought down. Now there are several ways to do this. The client and the lending institution may renegotiate the rate of interest, lowering it; thus bringing down the amount payable each month or by increasing the term of the loan.
Loan adjustment schemes have been made possible by the joint effort of the United States government and financial institutions like Wells Fargo, Countrywide among others
Benefits of Loan Modification
There are several benefits of home loan modification. The primary one is of course the fact that you get to keep your home. The other benefits include lower and affordable mortgage payment and no calls from creditors and collection agencies. Besides, you could sell your home for a profit when the real estate market picks up momentum again.
If you are interested in procuring a home loan modification, there are two ways to go about it:
1. You could start by penning your hardship letter to the bank and then start gathering all the documents that you will need to support it
2. Or you could avail the services of a professional establishment that would negotiate with the bank on your behalf.
Statistically, people who interact with the bank on their own without a mediator stand a better chance of procuring a home loan modification.
Going to an agency that deals in home loan adjustments will cost you in the vicinity of a few thousand dollars. Remember that the person who stands to lose the most in case of a foreclosure is you; so you will obviously be the best person to present your case to the bank. A lot will depend on whether you can convince the bank that you are a responsible person who intends to repay the loan but cannot due to certain hardships. That you are absolutely confident that you will be able to meet the payments after the loan modification has been granted.
If you are a home owner trying to save your home from foreclosure, home loan modification may be the perfect solution for you.
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