Tuesday, January 24, 2017
Tips For A Successful Mortgage Loan Modification
If you are behind on your house payments, or are struggling to maintain your mortgage in a current status, you have several options. Refinancing is a good tool, but certain requirements such as valuation of your home and proof of income must be provided. Another way to achieve similar results is to ask for your lender to modify their mortgage. A modified mortgage is just as binding as the original mortgage, it just includes a variation of the original mortgage terms. Most notably, the interest rate will be reduced, resulting in lower monthly payments. But getting a modification can be hard, so it is a good practice to have a qualified professional by your side throughout the process.
Some tips from within the industry, for a successful mortgage loan modification, include doing the following:
• Do the math in advance of the final offer, to make sure that you are able to make even the modified payment amount. If not, you should ask for terms that do work for your budget, or look for alternatives such as forbearance or having the past due payments placed at the end of your loan for repayment.
• Have a good idea of what to expect during the process, which can come from partnering with a competent legal professional to explain the process to you. When you are prepared for what lies ahead, you are better positioned to reach satisfactory results. But if your expectations are not in line with probable outcomes, you will be dissatisfied with the result.
• Take some time to acquaint yourself with the terminology that will be used, so you understand what is being presented to you. Knowing your role (as mortgagor) and the bank’s role (as mortgagee) will make it easier to read through the paperwork you receive.
It is also a good idea to come up with a budget that includes your new payment, and cut back on things that could prevent you from being successful. Keep in mind that while your finances go in large part to your home each month, you do have other expenses to pay. Writing down your monthly costs will help you see where you can save once your house payment is more manageable. This will allow you to establish a savings or emergency fund, so when money troubles crop up in the future you have a plan in place.
For more information about mortgage modifications and how to manage debt, call us today or reach us online at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations for more convenient one on one office visits.