Mortgage Loan Modification Negotiation Process
No homeowner would want to lose his or her home as a result of a forced foreclosure. In most cases, when a homeowner finds it difficult to make the mortgage payments, he or she decides to pay off the loan by selling the home. This is not the best solution to such a problem, especially when it is extremely difficult to buy a house in the current economic condition. Mortgage modification is one way by which a homeowner can repay his present mortgage loan, and there are a few steps to be taken in order to complete the modification process. Click here for more information.
Contact a Housing Counselor
The first step to be done is to contact a housing counselor who can guide you in the initiation of the loan modification process and also its smooth completion. In order to make sure that your efforts do not end up in vain, it is better to seek the guidance of an experienced house counselor. There are chances of your loan modification request getting rejected by your lender. But, if the request is made by a housing counselor, these chances are less.
Prepare a Mortgage Hardship Letter
The next step in applying for a loan modification is to prepare a mortgage hardship letter. This letter must contain the genuine reason due to which you are unable to make your monthly mortgage payments regularly. There are homeowners who lie about their current financial situation to the lenders just to get their mortgage payments reduced. Lenders, having seen a lot of such borrowers, will easily find out if you make a false statement. Hence, be genuine with your hardship letter.
Plan the Process Entirely
People opt for a mortgage loan modification for several reasons, and before you apply for one, you must decide upon the reason for which you are opting to modify your mortgage loan. If your reason is to obtain a reduced interest rate, then you must first check with your lender if your reasons would be considered for offering you a reduction in your loan interest rate. Whatever may be your reason; your method of negotiation must revolve around it.
Present a Budget
A more genuine approach towards applying for a mortgage loan negotiation would be to present your lender with a budget that you have framed in order to make payments toward your modified loan. Make sure your budget is economical, and also remember that it should contain details about how you will manage the payments of your secured and unsecured loans after the modification. This will create confidence in the lender that you will pay back the loan on time, and that you have all the means to do so.
Have Sensible Anticipations
Always have sensible anticipations about what you will be able to obtain from your lender. Do not have unrealistic expectations, which may lead to disappointments. The best approach would be to accept to terms that would benefit both you, as the borrower, as well as your lender.
If you are planning to modify your mortgage loan, remember to follow the above mentioned steps to make the process as smooth and as peaceful as possible.