Getting a bank loan modification could be the solution you need to stay in your home, especially if you fall in that middle ground where you can't qualify for a refinance and don't meet the standards for the federal programs under the new Making Homes Affordable Plan. A bank loan modification may not afford the same payment reductions and tax breaks that one under the federal program would but it could very well keep you in your home.
Many nationwide banks are stepping up their loan modification programs in order to help keep people in their homes. They will give you a fresh start by modifying the terms of your loan so you can make the payments. Past due amounts and penalties can be added to your principal balance and rolled into a new payment. Escrow payments can also be added in this way. Your financial history is not blemished by a loan modification. While late or missed payments will in fact show up on your credit report, a loan modification will not.
To see if you qualify for a bank loan modification you would need to meet with a bank or send your financial information to a bank of your choice. You would need to include proof of your current income, all of your monthly expenses, your mortgage history and a letter of hardship that explains the details of your current situation. Once approved, the specifics of what will be modified in your loan will be explained to you.
Often times a simple reduction in the interest rate on your loan is all that is needed to get you a payment you can afford. Spreading your balance due over an extended period can also help you to make your payments on time. The many options that exist for you will be explained by your banker.
While government programs can offer better deals and tax breaks and perhaps be more profitable for you in the long run, not qualifying for one does not mean the end of the road for you. A bank loan modification can be the difference between losing and keeping your home. Taking that first initial step of calling your bank and getting some basic answers could be your first step to financial relief.
Contrary to popular belief, not all banks are dishonest and greedy. It is in the best interest of all banks and mortgage companies that you stay in your home and pay your mortgage. There are not enough buyers to recoup losses from homes that have gone into foreclosure. If your circumstances show that you need help, a loan modification will keep you in your home and the bank in business.
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Now, learn how to qualify for a loan modification. A home loan modification can keep you in your home.
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