Homeowners have gone through something of a rough patch in recent years, with the economic downturn causing many families to default on their mortgage. The number of foreclosures seems to be constantly on the rise, and if you don’t want to become part of that statistic, you might want to consider a loan modification. People are of the belief that financial institutions are all too willing to cast people out of their home, but the reality is that they would rather have a situation where the current owner is able to pay back the full amount of the mortgage. This is why they might just be willing to enter into negotiations for a loan modification.
You can approach the bank yourself when looking for a loan modification, but there are now also plenty of companies that will help you through the process, for a fee, of course. Whichever way you choose to go, there is a ton of paperwork that has to be submitted before the process can get off and running. You are going to need bank statements, pay stubs, income tax returns, credit reports and much more so that you can prove that your financial hardship is indeed valid. Putting this all together can be tough, which is why hiring help can be beneficial.
This is something that comes with a word of warning, though. You need to make sure that the loan modification company you choose has a legal representative working for them. Working with a company that is comprised of nothing but non-lawyers can lead to some serious legal issues down the road. Make sure that you talk to a lawyer about your loan modification or at the very least a real estate agent who is able to legally handle such a service.
While loan modification may be enough to help people dig out of their current financial hole, it is not something that is suitable for all homeowners. There is nothing worse than going through the loan modification process, only to find that you are still unable to meet your financial mortgage requirements once all has been said and done. This is why it is smart to know about your other options, which may include debt consolidation or bankruptcy. While time may be of the essence, it’s worth taking a little time to make sure that you are in fact making the right financial decision.
Another thing to consider is the manner in which you obtained your original loan. There was a period not so long ago where companies were handing out mortgages to people that would ordinarily never have qualified. If you fall into that category, there is little chance that any financial institution is going to be willing to extend into a loan modification with you. It’s important to look at all areas of your finances before deciding whether or not a loan modification is the right decision for you.