Some events in life like an illness, death, loss of a job or divorce can adversely affect your finances. In such times, your monthly mortgage payments can become a definite burden, causing you to falter on making them on time. This poses a problem as they start piling up month after month due to non-payment.
You must know that modifying your home loan is possible and that it can help you avoid foreclosure.A loan modification entails restructuring of your original loan to enable you to arrive at a more affordable payment amount. The Melbourne Mortgage Broker experts at Home Loan Comparison co have put together this overview of what needs to be done when restructuring a loan.
- Seeking Qualification
Your lender uses a series of criteria to decide your eligibility for modification of a loan. Look at these criteria:
- Financial hardship is the cause of your payment default
- Inability to refinance the loan
- Increase in your debt-to-income ratio
If the lender agrees to modify your loan, you will be put on a trial period to find out whether you can afford the new monthly payments. Lenders want to be sure about your ability to repay the loan. You will need to set up a meeting with your lender to discuss your financial problem and find a resolution.If in doubt, you can get more information about this from Home Loan Comparison co.
- Financial Proof of Hardship Is Essential
When you seek restructuring of a loan due to financial hardship, you require financial proof. You would need to present the following:
- All information related to your loan
- Bank statements
- Pay stubs
- Recent Income tax returns, both federal and state
- Letter of hardship
A letter of hardship explains your present financial situation. You also need to submit an application along with the above proofs.
- Protect Yourself From Scams
When you want to modify a loan, you may come across loan modification companies or that act as middlemen and you should be wary of them. You will find them charging higher fees for simple DIY tasks like mailing paperwork and replying to loan provider messages.
The other important issue is their honesty in dealing with you.You may face a situation where your payments are going to these companies rather than towards your mortgage. It is recommended that you avoid them and directly approach your lender. If you feel a scam is brewing, contact the FTC to report the matter.This may prove cost-effective and quicker. You can also contact the experts at Home Loan Comparison co for more information.
If you want to know more, don’t hesitate to contact us at Home Loan Comparison co on 0419 856 669.