|
Another important question that comes up when contemplating a loan modification is “how do you qualify?” First, keep in mind that while “loan modification” may sound intimidating, the process is much simpler than you probably perceive it to be. One important requirement for qualifying for a loan modification is that you must be able to prove a significant reduction of income or financial hardship that has affected your ability to pay your current mortgage. Please note that a financial hardship can include an interest increase from an ARM loan that has made making your monthly payment impossible. Additional hardship situations can include: divorce or separation, death of a spouse, loss of job or income, immediate family member illness, or even military service. A loan modification applicant should always plan on including a compelling hardship letter including a detailed description of your current and future financial situation with their application. Next, you must currently be employed or have a documented source of stable income. Finally, the mortgage that you are seeking a loan modification for must be for your primary residence. Two things to remember when looking to qualify for a loan modification are: you must be able to prove that you cannot make your current monthly payment, and you will need to show that you can pay the modified payment both now and in the future. Remember, the loan modification must make fiscal sense for the lender, if you cannot prove that you will be able to make your future modified payments, they will not approve the loan modification. You should be prepared to present documentation to corroborate your current and future financial status statements. While some lenders do require a delinquency of 60 -90 days or more on your current mortgage, others do not. What is most important is your ability to prove that you can no longer make your current monthly payment, nor will you be able to in the near future. Remember you will be required to provide financial documentation showing why you will be unable to make your payments to solidify your claim. If you are considering filing bankruptcy, do not. Many lenders will not consider you for a loan modification if you have in the past or are currently in the process of filing bankruptcy. Please contact your lender or mortgage specialist as soon as possible if you believe you may qualify for a loan modification or if you have any questions regarding the loan modification process. The specialist will review your specific scenario and provide you with the necessary information to evaluate your options and ensure that you are choose the best solution for your situation. |
