A popular online topic is the mortgage loan modification. With the recession and unemployment highs, Americans are struggling more than ever to find ways of paying their bills. RealtyTrac reported that this past week the number of US households facing foreclosure rose 32%. With numbers like this, many Americans are seeking help with modification of their home loans. Although there are qualified programs available, some homeowners are choosing to negotiate a modification with lenders themselves. Here are some tips to going about the negotiations.
Homeowners need to know their current financial position. They need to understand what their expenses are, what their income is and how much discretionary funding is available. The lender will ask these questions and want to know what financial state they are being asked to work with. Owners who need guidance can contact the Consumer Credit Counseling office for a free financial analysis.
Next, homeowners should contact their mortgage broker with qualified information on what their part will be in the modification. If a homeowner has an extra $250 to contribute to monthly payments to get back on track, the lender may be willing to work with them. Remember that lenders want their money. That is their goal and they will work with customers if there is a viable plan to work with.
Lenders will require that homeowners have some plan of action. It’s best to have an answer ready for the lender and be able to justify the reasoning.
If a homeowner’s financial problems are temporary, they should tell that to the lender. It is possible to postpone payments, tack them onto the end of the loan and get the homeowner back on track. The key here though is save up funds as the next postponed payment date is coming. Consumers should use cut-backs, short term loans or tap into a nest egg to make sure they are well equipped to handle mortgage loan modification.
Homeowners with adjustable rate mortgages are in particularly difficult situations when the rate goes up. Higher payments can make serious financial issues arise. If a homeowner has an adjustable rate, call the lender and request a modification to a fixed rate. They should be ready, however, to present a plan as to how this is going to happen however. This is where they should be willing to get a second job, or better paying job, to show the mortgage company that they will be able to make the payments in the future.
In the end, the mortgage loan modification process may be the most viable option to saving a home. Lenders are willing to work with homeowners fairly, but there needs to be adequate communication and justification throughout the process. All homeowners need to come to the negotiating table prepared with documentation including expenses, income, debt, and the proposed solution to the issue. Being ready makes lenders more willing to listen and work with the customer. Mortgage companies want their money; they don’t necessarily want the property. And in today’s recessive economy lenders are more willing than ever to try to come to a solution for homeowners and help them save their homes.