Can’t pay your mortgage? Considering bankruptcy but do not want to lose your house? Times are tough. Millions of Americans are losing their homes but you do not have to one of them. Getting a loan modification can help you lower your mortgage rate and secure you a better rate.
What is a loan modification? To “negotiate” a loan modification means to talk to your lender and negotiate a more favorable payment plan. This usually means lowering your rate or extending the payment plan. There are several steps:
1. Realize that you cannot pay your current mortgage rates
2. Create a income vs. expense worksheet. Include your total income, your household expenses and then calculate how much you can reasonably afford per month to pay mortgage.
3. Write a “letter of hardship” explaining your current financial situation and why you need a loan modification. Lenders do not want you to file for bankruptcy and would rather give you a loan modification. Make sure to emphasize that you can pay off your mortgage if you are given a modification. This will increase your chances of success.
4. Contact the loan modification department of your lending company. Be patient and be nice. There brokers are your key to a modification.
5. Your broker will ask you for your income worksheet and your letter of hardship. Have those ready.
6. Now its negotiation time. Your broker will be working with the bank to see if you can get a modification. At this time, read our “loan modification negotiation tips”.
7. Once negotiations have ended the decision will be made. If you failed to secure a loan modification consider contact an attorney to help you negotiate. Qualified attorney have the legal power to aggressively make you a priority to your lender. Beware of unqualified attorneys or so called “loan modification” companies. These companies do not have any more knowledge than you do from reading this article.
Good luck! If you succeed then I can guarantee you that you that paying your mortgage will be a lesser burden.