Disclaimer: This article has been written for general information purposes only. The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.
Loan modifications are the most common option used by mortgage companies to stop foreclosure. A loan modification is an agreement between you and your mortgage company to change the original terms of your mortgage. For example, a loan modification might allow you to add past due payments to the balance of the loan, lower your monthly payment, lower your interest rate, change your interest rate from a variable rate to a fixed rate, and/or extend the number of years you have to repay your mortgage. Modifying your loan with new, more favorable terms, can save you thousands over the life of your loan. If you are facing a hardship, and you need help, a loan modification might be just the solution you're looking for.
Benefits of a Loan Modification
Loan modifications have several substantial benefits, including:
Stop Foreclosure. A loan modification helps you stop foreclosure and stay in your home by resolving your delinquency and bringing your mortgage current again.
Lower Mortgage Payment. With a loan modification, you can modify the terms of your original mortgage, often lowering your monthly payment amount, so that your mortgage is more affordable and sustainable.
Lower Interest Rate. With a loan modification, you may be able to take advantage of lower interest rates, saving yourself thousands over the life of your loan.
Fixed Interest Rate. If you currently have an adjustable interest rate, a loan modification can give you a fixed interest rate (often lower than your current rate), potentially saving you thousands over the life of your loan.
Principal Forgiveness. Under a loan modification, your mortgage company may be willing to lower the amount you owe on your mortgage if you currently owe more than your property is worth.
Rebuild Your Credit. A loan modification is much less damaging to your credit score than a foreclosure and resolves any existing mortgage delinquency so that your credit can start rebuilding immediately.
Eligibility Requirements to Receive a Loan Modification
Requirements for receiving a loan modification vary from lender to lender. In general, you must be experiencing a financial hardship that has caused you, or will soon cause you, to fall behind on your mortgage.
You will be required to fill out an application and submit documentation that will take into account your income, assets, and expenses. Your mortgage company will evaluate your application to determine if they are able to offer you a loan modification. If you're not eligible for a loan modification, don't worry, there are other options to stop foreclosure that you may qualify for.
The key to stopping foreclosure, using a loan modification or any other option, is being proactive and acting quickly. Foreclosure can have serious negative consequences on your ability to get new housing, credit, and maybe even potential employment, for many years. Act now and let Dickens Law Group help you stop foreclosure and save your home. Contact us today for a FREE CONSULTATION!