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Loan Modification: 5 Steps That May Increase Chances for a Positive Outcome

Posted By admin || 27-Jul-2012

Loan Modification: 5 Steps That May Increase Chances for a Positive OutcomeLoan modification is often the last hope for a homeowner looking to avoid foreclosure and save their home.  Preparing for the process ahead of time by getting familiar with what to expect may help increase the chances of getting your mortgage modified.

The following steps may give you a heads up on actions to perform that may help you keep your house:

  1. Contact a certified housing counselor.  Housing counselors not only can give you an idea of what to expect during the process, they may help you explore available options for your situation, especially if your request for modification gets denied.  Having them review your situation may give you an idea of what you qualify for.
  2. Make sure the modification can be sustained.  There are different options to modify a loan such as forbearance, repayment plans or lowering of interest rates.  The final modification should be something you see yourself managing in the future.
  3. Your expectations should be realistic.  Your lender will make decisions based on your situation and what you present. Both parties should work toward reaching a fair, reasonable agreement but things may not always turn out the way you would expect.
  4. Take responsibility for your decisions and be honest about what brought you to this point.  If you haven't been following your budget as planned or let debt get out of control, take responsibility for your actions.  Make needed changes so you can adjust to your modification.
  5. Look for ways to be smarter about your finances.  Get financially literate about what you can do stay in control of your money.  Besides a financial counselor, seek advice from credit counseling or financial coaching.

Questions or concerns can be discussed with your lender, housing counselor or loan modification attorney.

Categories: Loans / Mortgages
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