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What A Loan Modification Takes   

 

When faced with a situation where you think you will not be able to make your payments, you might consider looking into whether you should get a loan modification, or if mortgage refinancing is the way you should go. A loan modification is when the bank changes the terms of a loan so that your monthly payment will be lowered and you will be able to afford them better. There are many unforeseen circumstances, such as job loss or medical issues that might cause you to be eligible for a loan modification. It sounds like a fabulous idea, but you need to know that it takes a lot of work. It’s an option for some people, but is it right for you? 

 

To be able to apply for a loan modification, you have to be behind on your payments so far that you will not be able to make up the difference. If you are current on your payments, you will not be able to apply for this type of loan. When you make a request to the bank, they will look at your situation and then make a decision of whether or not it will same them money to do a modification, or if they will continue to foreclosure. The banks know what kind of time and money it takes to foreclose on a home, and if they feel like doing a loan modification will cost them less, then that is what they will typically do. They might decide not to grant your request for a loan modification if they think a foreclosure is in their best interest, so be prepared in case they deny your request. 

 

If your situation is one that you just can’t stop spending money and you keep spending more than you make, you will probably not be eligible for a loan modification. You should maybe to a mortgage refinance or possibly even apply for a bad credit mortgage. Also, if you are upside down on the house because of market fluctuations, you will not be eligible. A loan modification is really just for people who had unforeseen hardships, including loss of employment, medical issues, or the death of a family member, and that is what got them behind in their payments. 

 

You will need to be employed and meet the other requirements and provide the lender with the documentation they need to get a loan modification. You will have to work with an approved government counselor to know if you qualify or not and if a modification would benefit you in your situation.