Foreclosure Is NOT The Only Choice

Foreclosure Is NOT The Only Choice

Considering Home Loan Modification? Read Through These Basic Facts

Mortgage Modification really means a permanent change in one or more of the terms of your home loan allowing it to be changed so that you have a lower payment.

Read through the following to determine whether home loan modification is right for you:

* This service is a viable option when the rate or terms of your current home loan make it impossible for you to continue making the payments, thus risking losing your home. * Mortgage modification is not synonymous with debt consolidation, refinancing loans, or even forbearance. Your lender is agreeing to change the terms of your mortgage originally agreed to when you closed on your home or refinanced. * Mortgage modifications stop foreclosure proceedings and put you back in good standing with your lender. There are some other facts that explain why lenders actually want to work with you to negotiate a loan modification.

The good thing about loan modification is that you can roll the principal and interest, past due escrow, and late fees into the mortgage modification and thus will not be lost revenue to the lender. Loan modifications may use a step rate approach or an extended term methodology to allow you to repay and get up to speed on your mortgage. It's a win win situation - as you get more time to pay, and your lender gets more overall interest!

Steer Clear of Foreclosure with a Home Loan Modification

Mortgage lenders don't want to foreclose on you any more than you want it to happen. Face it - they're not in the real estate business - they are in the banking business. They'd much rather work with you to modify your home loan. Loan modification lets you spare your credit score the major damage it would take from a foreclosure. And, if you don't know it yet, let me tell you: Your credit score is your key to the kingdom, so to speak - so keeping it in good shape should always be your goal.

Here are the requirements you must meet in order to be considered a good candidate for a loan modification process to be started on your behalf:

* Your monthly mortgage must be impacted by a verifiable reduction in income * You must be currently employed or have another source of verifiable, stable and predictable monthly income * The home loan you wish to modify must be for your primary residence

If your current mortgage payments are too much for you to handle, don't panic. If you have the ability to pay your mortgage at a lower rate, loan modification may very well be a viable way for you to stay out of foreclosure.