If you are one of the many homeowners who purchased your home with an alternative or exotic type of loan program that provided you with a short-term fixed-rate mortgage, you will shortly be facing a potentially significant raise in your interest rate. You will be surprised to find your monthly payments increasing to a rate that is no longer feasible for you to manage. Home loan modification programs are designed specifically to assist in relieving you from an extreme and unexpected burden.
In one extreme case, a borrower completed their initial fixed period only to discover their rates had risen from $800 to almost $3000. Where $800 per month is manageable to this family, they were not prepared for the significant rate change. The home had significantly changed its position in the market, so the only option the borrower had was to petition for loan modification from the bank.
Follow this basic tip and you can start your Loan Modification process with confidence:
Most importantly, you must create a hardship letter. The letter will need to describe your situation with detail to your hardship. Keep in mind that your lender will be busy with paperwork of many types, so be sure to keep your letter brief and descriptive.
The primary things for the letter should include the reasons why the adjusted rates are not feasible for you or what is occurring that prevents you from making your payments. One or two pages should be effective. Be sure to type whenever possible and check your work for errors since the easier the lender can read the document, the faster the process can move along.
Knowing what a lender will consider can direct the ingredients of your letter. Most lenders will consider loan modification for hardship cases that were unavoidable or natural causes. For example, a lender would have more room for modification in the case of a flood, medical emergency or job loss due to downsizing or company closure. Other situations that you may unfortunately be facing could be death of a family member, forced job relocation, or adjustable rate mortgage that has risen too high. There are many other cases that are acceptable and a conversation with a lender can give you an idea if your situation has loan modification potential.
Be sure to get your letter started as soon as you think there may be a problem. Usually, if a borrower thinks there could be a future problem, the problem already exists. Don't let yourself fall behind in payments because your credit score will drop and future potential purchases and refinancing will be increasingly difficult. Remember, the lender is going to be busy. Many times the loan modification process can take weeks to get started and the finish date can be 90 days or longer. For this reason it is important that you are well informed when you begin the process, there are many loan modification resources available to you.
To learn more about the home mortgage loan modification process, please visit Loan Modification - Save Your Home
Article Source: http://EzineArticles.com/?expert=Jonathan_Gillham
http://EzineArticles.com/?Important-Tip-For-Starting-the-Loan-Modification-Process&id=1954295
About the Author
Frank is a loan modification specilist who has helped in the creation of a complete loan modification kit which is available at http://www.foreclosuresmedic.com
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