Tips on Mortgage Modification

If you are overwhelmed with your current mortgage payments, there is no reason to despair. You may have the option to restructure your home loan through a mortgage modification loan. We here at PaydayLoansCashAdvance understand how difficult it can be sometimes so we have put together a few loan modification tips that will teach you everything you need to know to keep your house and protect your credit score.

Getting Started

When you approach your lender about mortgage modification, they will want some supporting documentation from you. Ideally, you should have the following paperwork on hand or easily accessible:

  • Monthly statement from your mortgage lender
  • Documents proving how much your monthly HOA fees or dues are
  • Paperwork on second mortgages or HELOC (Home Equity Line of Credit)
  • Copies of information on homeowner’s insurance and property taxes
  • Copies of your last year’s income tax return
  • Pay stubs or letter from employer to use as proof of income
  • Profit/loss sheets to show income if self employed
  • Paperwork on non-mortgage related debts including student loans, car loans, credit cards, and signature loans

The role of this paperwork is to prove why you have difficulty paying your mortgage. The loan officer will use these details when determining the type of loan modification for which you qualify.

Resources for Mortgage Modification

Luckily, there is no reason to modify mortgage payments or terms on your own. There are countless organizations and resources that can guide you along your journey. The following organizations are federally run organizations that will be able to answer your questions and concerns on loan modification issues:

  • HUD (Department of Housing and Urban Development) is the national organization that oversees mortgage lending. You can contact a HUD advisor to discuss how to modify mortgage payments.
  • HAMP (Home Affordable Modification Program) is a federal program that can help you to lower the interest on your current mortgage or increase the length of the term on the loan. They may even be able to help you reduce the principal that is owed on your loan.
  • HAFA (Home Affordable Foreclosure Alternatives) is a government program that can help you find ways to stay in your home and avoid foreclosure.

There may also be local programs in your county or city that can help you as well. To learn about these programs, you can contact HUD or you can visit the webpage for your city or county.

Creating Your Mortgage Modification Story

Many loan modification programs require the customer to create a narrative about why they cannot afford their current mortgage payments. In your mortgage modification story, you may explain the reasons that lead you to being overwhelmed with your current mortgage obligations, and you may also explain how you plan to balance your mortgage payments after the modification process has been completed.

The purpose of this step is to ensure that you are focused on the process and that you are committed to making your payments after the completion of the loan modification. These statements should be straightforward, honest, and brief. They help prove to the lender that you are serious, and they help you to create a budget for all of your financial obligations.

Pick Up the Phone

Once you have all of your documents ready and you have ironed out the details with a HUD counselor, you are ready to contact a loan modification officer. You can contact someone from a private bank, from the bank of your current mortgage, or from the FHA (Federal Housing Administration). Your HUD counselor may be able to give you more ideas about whom you can contact as well. While on the phone, you should have your paperwork ready to answer questions, and you should have your pen ready to take notes. You should take notes on everything that is said as well as to whom you are speaking. Later, you can refer to these notes when you are negotiating the terms of your modification.

The final and most important thing to remember is to remain patient. The mortgage modification process is not that simple, and it may take a lot of time. You need to be prepared to spend a lot of time talking on the phone and even holding on the phone. You will also spend a lot of time looking for extra documents and meeting with loan advisers. At the end of the process, however, your patience will have been well worth the effort. You may save hundreds of dollars per month, you may avoid foreclosure, and you may significantly reduce the stress in your life. Our team at PaydayLoansCashAdvance wishes you the best of luck through this journey.

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