| Many people do not understand what it takes to get | | | | more money and rebuild your financial status. |
| qualified for a loan modification. The general rule of | | | | 3. Proof of a stable job will also be counted towards |
| getting approved is that you must be able to afford it! | | | | qualification. The number of years you have worked |
| What this means is that you should be able to show | | | | consistently and what company you work for are |
| income and assets that will allow you to carry your | | | | taken into consideration. Also, having significant savings |
| mortgage with a low risk of re-defaulting. But, qualifying | | | | in a retirement account can help as well. |
| for loan modification is almost the same as qualifying | | | | 4. If you are not late on your mortgage, it will be harder |
| for a traditional loan without pulling credit or getting an | | | | to get a loan arrangements approved. Lenders may |
| appraisal. | | | | not state it, but being late is proof that you are having |
| Lenders will qualify you for a loan modification if it | | | | financial issues and are more willing to help when you |
| makes sense. For example, if a lender has to reduce | | | | are in this position. This is the same for short sales and |
| your mortgage rate to 1% in order to qualify you for a | | | | is a reason why some homeowners have been |
| loan modification, you can forget getting approved. | | | | advised to miss payments prior to requesting a loan |
| Here is a general rule of thumb to determine if you are | | | | modification. |
| wasting your time pursuing a loan modification: | | | | 5. Loan arrangements can take anywhere from one |
| Calculate ALL of your monthly expenses. If you pay | | | | to twelve months to complete, depending on your |
| your home insurance bi-annually, break this cost down | | | | situation. |
| on a monthly basis. Then calculate ALL of your | | | | 6. Many loan arrangements that can be done quickly |
| income, to include interest, bonuses, commissions, etc. If | | | | are changes in the mortgage terms to reduce the |
| you are positive or negative about $200, you have a | | | | monthly payment, but this is usually for a short term |
| good chance of getting a loan modification. If the lender | | | | 2-3 years. After this period, the rates will go up and so |
| is able to modify your loan so that you can save $700 | | | | will the payments. |
| mth then it is believed you would have a better chance | | | | 7. It is possible for some lenders to offer a loan |
| of handling any financial setbacks and reduce the risk | | | | arrangements of a new fixed rate over 30 years. |
| of you defaulting on your loan. | | | | 8. Attempting a reduction in rate and principal is |
| To better understand a homeowners chance of | | | | generally more difficult to obtain. A lender would rather |
| getting a loan arrangements, here are some truths to | | | | give you a lower rate for a longer period than reduce |
| know: | | | | principal. |
| 1. It has been reported that candidates who received a | | | | 9. If you have multiple liens on your property, it is more |
| loan arrangements defaulted again within 6 months | | | | important to get a loan arrangements on the loan with |
| 2. In order to get a loan arrangements approved, you | | | | the higher balance. |
| need to have enough income to cover all of your | | | | 10. Many loan arrangements do not get approved. If |
| monthly expenses. For example, if your current | | | | you are at risk of being late, or are already late, start |
| monthly expenses allow for $200 to savings, you may | | | | your loan arrangements immediately to allow time for |
| be able to qualify for a loan modification. The idea is | | | | you to pursue other options if needed, such as a Short |
| that the loan arrangements would allow you to save | | | | Sale or Bankruptcy. |