Showing posts with label Loan Modification. Show all posts
Showing posts with label Loan Modification. Show all posts

Tuesday, September 14, 2021

Need to Modify Your Loan? How to Do It Right the First Time

You should be thorough, savvy, and concise before making any significant financial decisions. A good example would be when you want to modify your loan when the going gets tough. Doing this can be a considerable challenge because you have to consider several details. Fortunately, there is a helpful guide you can use.

Find out If You Qualify for a Loan Modification

Not everyone who has challenges with mortgage payments can qualify for loan modifications. You must be facing imminent default, meaning there is a legitimate issue compromising your ability to make up for payments. Usually, challenges such as a developing health issue, the loss of a spouse, or a job are some common reasons.

Learn More About Loan Modification Programs

A significant number of lenders offer in-house loan modification programs. The modifications they make to your repayment plans can be temporary or permanent. You can learn about the modification programs your service offers by asking. 

While the state offered help with modifications through the Home Affordable Modification program, it's no longer functional these days. There is also a financial downside that can occur due to loan modifications

It's likely to hurt your average credit score. While the resulting compromise on your score won't be as bad as a foreclosure, it will hurt your ability to get financial help.

Consult With Your Loan Servicer

If you are facing a challenge with loan payments, get in touch with your servicer. They should provide you with all the available options to help solve the problem. You have to act fast, as procrastination will likely lead to more financial challenges. 

Usually, the process of applying for a loan medication varies between different lenders. They might have to determine whether your application is legitimate first. If the servicer denies your application, you can also file an appeal.

Consider Seeking Help From a Financial Consultant

A good financial consultant should provide you with excellent suggestions for loan modifications. While their services might come at a cost, they will help make getting such financial help easier. 

 If you are already hard up, you can also use the services of a HUD-approved housing counselor. They should help you in challenging the decision and gain better insight into the options available.

Applying for a modification loan using an informed approach will give your peace of mind. If you need help, don't shy away from getting it from a reputable servicer.

Wednesday, June 30, 2021

How to Prevent Foreclosure When Struggling to Pay Your Mortgage

When you cannot continue making your loan repayments, lenders and banks will consider selling the asset you had registered as collateral, such as a home. 

There are, however, steps that can help you prevent foreclosure from happening. Below are the hints that you need to consider.

Request for a Loan Modification

When you are stuck on repaying your mortgage loan, one thing you can do is negotiate with your lender. The negotiation will help you reduce the loan terms that you had agreed upon when signing the agreement. 

When requesting a loan modification, you want to either reduce the monthly interest rate or request an extension of your loan term. It, therefore, ensures that you do not struggle to pay for the remaining loan.

Forbearance Agreement

You are eligible to enter this agreement only when you are facing financial constraints on paying the loan. For example, it could be a medical emergency or sudden income reduction. 

You will, therefore, need to prove to your lender the situation that you are currently in, as this will increase your chances of the forbearance is granted. During this period, you should regain your financial stability hence can, after that, pay for the mortgage loan without trouble.

File for Bankruptcy

By filing for bankruptcy, you will be delaying the foreclosure process. You could either file for chapter 13 or chapter 7 bankruptcy. 

To know which is best for your current financial position, it would be best that you consult with a bankruptcy attorney. However, you should note that the lender has the authority to get full payment for the mortgage loan if your request for bankruptcy is suspended. 

Due to this legal move, you will have created a negative credit score, which means that you will not qualify for refinancing.

Consider a Short Sale

When you have considered all the available options yet are not working to your benefit, selling your home is the last resort. You will have to sell the lender your house even though it does not cover the entire outstanding balance. 

Before you proceed with this option, it would be best that you consult with your lender to know whether they agree with your plan.

To ensure that you do not get into this situation, it would help if you do not accumulate your debt. However, if it is inevitable, ensure to go through the options above to know which would be helpful to you.

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