How Can I Qualify for a Mortgage Loan Modification?

 Posted on March 04, 2021 in Loan Modification

Any family can experience financial difficulties that cause them to be unable to pay some or all of their ongoing expenses. Those who are struggling to make ends meet may face the possibility that they could default on their home mortgage, which could result in foreclosure. Fortunately, families in these situations have options, including applying for loan modifications that may reduce the amount of their payments and ensure that they can cover these and other regular costs. Homeowners will want to understand their options for modifying a mortgage loan and the steps they can take to ensure that these modifications will be approved by their lender.

Applying for Mortgage Modifications

There are multiple types of modifications that may be available to ensure that a homeowner can continue making mortgage payments. The loan’s interest rate may be lowered, or a loan may be converted from an adjustable-rate mortgage to one with a fixed interest rate. The term of the loan may be extended, allowing it to be paid off through lower payments over a longer period of time. In many cases, it is in a lender’s best interests to work with a borrower, since they will be likely to suffer financial losses if they need to foreclose on a home and place it up for sale.

To qualify for a loan modification, a borrower must usually have missed at least one payment, and they must have experienced financial hardship that has made it difficult or impossible to meet their obligations. Applicable forms of hardship may include an illness that has resulted in significant medical expenses, a long-term disability, the death of a family member who provided income used to pay ongoing expenses, or a natural disaster that has resulted in catastrophic property loss.

When applying for a mortgage loan modification, a homeowner will need to provide documentation of their financial hardship that shows that they are experiencing ongoing issues that are expected to last for the foreseeable future and that they do not currently have cash or other assets that could be used to make ongoing mortgage payments. Documentation may include a variety of financial records, such as bank statements, pay stubs, tax returns, bills, and information about investments or other assets. In addition to demonstrating that they cannot make their current mortgage payments, a homeowner will also need to show that they will be able to make continuing payments under their modified mortgage loan.

Contact Our Lake Forest Loan Modification Lawyers

If you are struggling to make mortgage payments or are facing the threat of foreclosure, you will want to understand the steps you can take to regain financial stability. At  Newland & Newland, LLP, we can review your finances and advise you of your options. We will provide you with representation as you apply for loan modifications, and we will help you negotiate favorable terms that will allow you to continue making payments and living in your home. To get the legal help you need, contact our Lake County foreclosure defense attorneys at 847-549-0000 and set up a free consultation.

Sources:

https://www.experian.com/blogs/ask-experian/how-to-get-a-mortgage-modification/

https://www.mortgageloan.com/keys-getting-approved-loan-modification