Desperate and defaulting homeowners looking for relief need to learn how to complete a loan modification application correctly so they will qualify for the help they need. A loan modification can be the solution that offers long term, affordable mortgage payments that will allow homeowners to avert foreclosure and stay in their home. Almost all of the major lenders have agreed to offer the Federal program that offers to modify loans for borrowers facing financial hardship. But how does a needy homeowner start the application process? More importantly, how can a desperate borrower increase their chance for approval with their lender so they obtain a new, low mortgage payment?
Here are the Top 10 FAQS about a loan modification application to help answer some of those important questions:
Does every homeowner qualify for a loan modification? Unfortunately, no, a homeowner must be able to meet certain required qualifications in order to obtain a loan workout. Do I have to be delinquent on my payments to qualify for help? No, but you must show evidence of imminent financial hardship-meaning that if you don't get help you will become delinquent due to increase expenses or less income. However, at this time, priority is given to those borrowers who are facing foreclosure in the near future. Can I get a loan modification if I have filed Bankruptcy? If you are in active Chapter 7, then you must wait until the case is discharged to apply. Chapter 13 borrowers must obtain court approval for any changes to their debts. What is an acceptable hardship situation? While each borrower facing a unique situation, most lenders have generally agreed that divorce or separation, job loss, decreased income, illness or medical expenses, death of family member, military duty, incarceration and natural disaster are all valid reasons to submit a loan modification application. Do I have to prove my hardship? The lender will ask for a Hardship Letter which will briefly describe your situation, what steps have been take to correct the situation and your intention to remain current in the future. Borrowers can use an outline and hardship letter template to help write a convincing hardship letter. What loan modification forms are required and where do I get them? Your application will have to include a borrowers statement that provides your general information and financial statements that detail your income and expenses so that lender has a snapshot of your current financial situation. What else do I need to give my lender to determine if I qualify? You will be asked to provide your paycheck stubs, bank statements and tax. I owe more than my home is worth-can I still submit a loan modification application? Yes, there is actually more incentive for your bank to offer you a lower mortgage payment so you can stay in your home as they stand to lose more money by foreclosing due to the decreased value of your home. Does a loan modification hurt my credit? The loan workout itself will not reflect on your credit report, however if you have had late payments and are delinquent, that will usually be reported to the credit bureaus. Interestingly, some lenders have delayed their reporting of delinquent loan payments in an effort to give the homeowner the opportunity to explore refinancing options before hitting the credit report. Whats the best way to get started on my loan modification application? First, you must take the time to learn as much as you can about the process so that you can increase your chances of success by preparing an acceptable application to your lender. Once you know and understand what your bank needs to see in order to qualify you for help, you will be able to prepare your paperwork properly so you can get the help you need and deserve.
Homeowners seeking loan modification help should learn a bit about the process before contacting their lender. A knowledgeable homeowner is a powerful homeowner. Make the decision to take control of your financial future by taking the time to research, learn and prepare. Spend just a couple of hours learning the basics, and your chances of success will be much greater. The Loan Mod Quick App will help you fine tune your financial statement and submit an accurate and acceptable application. This is serious stuff, your families home and credit is on the line-your time and effort will be well spent and you will be able to get back on the path to secure home ownership.
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