Home loan modification may be the only remedy between you and the property foreclosed.
However, you have to know your options and find out first if you are qualified.
A loan modification is employed when the borrower cannot make the payments in accordance with the present terms.
With this, it's possible to renegotiate with the new terms and have a permanent change in the home loan.
You should begin to take into consideration home loan modification when you know you cannot make your monthly payment because you had a cut in your pay stub due to change in job or the monthly payment becomes too high.
If you can still afford your mortgage then you may not yet change your loan terms however, if you are on the brink of foreclosure then loan modification is an option.
You are most likely to get a home loan modification in accordance with the federal government website Making Home Affordable if you'll qualify under the following criteria: The amount of debt in your first mortgage is equal to or less than $729,750; Your home is your primary residence; you find it difficult to pay your monthly mortgage but you are still employed; you got your present mortgage before January 1, 2009; and your house payment is more than 31 percent of your current gross income.
If you meet any of these standards, you can make an appointment with your loan provider or a HUD counselor immediately.
If you think that your mortgage payments are too high and you are worried that you'll not be able to pay them, it is important to know your options.
Just as you can have loan modification as one of the option another popular option is to refinance.
Both can improve the terms of your mortgage but they have some important differences.
If you want to refinance your home loan for better terms, then you should be caught up with your mortgage payments.
The stronger you are financially, the better.
You should know that you will pay closing costs with refinancing.
Loan modification companies have boomed in response to the widespread housing crisis.
They are claiming that they can navigate through the process, but they are not the one who can change the terms of the loan.
It is up to the original lender, and you might do just as well to talk to the lender yourself.
The government can also give free advice.
Be careful when you make a call, because these loan companies which are not really affiliated with the federal officials may disguise themselves as connected with the government.
Because loan modification doesn't involve closing costs, it becomes a more appealing option.
Though it's up to the lender whether or not you will get a loan modification.
You have to present your situation to the lender and make clear that you can't make your payments unless you have your loan modified.
Your lender doesn't want you to default.
If your lender offers you refinance instead, don't turn it down just because of the closing and taxes.
Do the math first and compute.
The provider knows what is best for your particular situation.