Friday, August 4, 2017

Do I Have To Pay A Down Payment To Modify My Mortgage?

Mortgage modifications are a great way to reduce your monthly mortgage payments. A modification will lower your interest rate, thus giving you a lower payment. But there are rules and procedures to follow and it is a good idea to have some general knowledge before you call your lender about this option. First, you need to know that your lender has the power to change the terms of your mortgage because it is their mortgage to modify. Second, you should not be asked to have your home appraised because that happened when you bought your home and used your lender for the financing. Valuation data should already be part of your existing loan file. Third, you should expect to be provided an application to fill out and return, and should do so promptly with any documents requested.
A question that often arises is whether the homeowner has to pay anything out of pocket for the modification, and while all modifications are different the answer is generally that no upfront funds are needed. 

Even though you will go through a closing just like when the house was bought, you can roll the closing costs into the modification and should also not be asked for a down payment. Those are the things you should not have to do, it is also good to know what you will have to do though and those include:

         Proving financial ability to repay the modified loan. This is most typically done by providing paystubs and copies of tax returns.
         Providing your employment information. You will be asked to fill out an application for modification and part of that application contains spots to provide your employer’s name, address, phone number, and how long you have been employed.
         Insuring the home and listing the lender as the loss payee on the policy.
         Maintaining the property taxes in a current status.
If you are interested in modifying your mortgage, let us help. We work with lenders every day to work out solutions for our clients’ financial issues. We know your money is important to you and work hard to help you transition from a bad financial spot to one that is more stable and secure.

For more information about what is required to modify your mortgage, call us today or reach us online at We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.

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