Getting a Lower Payment in 4 Steps Using a Mortgage Modification
If you don't already know, getting a mortgage modification can substantially lower your payments and your interest rate. If you are facing foreclosure it can also stop the foreclosure process.
After 3 years of helping our clients successfully modify their loans and writing a step by step guide on how to modify your own loan, this is our insiders list of the necessary steps to get a mortgage modification approved.
- Call your lender and ask them what type of mortgage modification program they offer. If your home is your primary residence and the loan amount is less than $729,000 ask them if they are offering the Obama mortgage modification program or Making Home Affordable Program. No matter which program they are offering ask them to forward you the paperwork ASAP.
This eBook explains each mortgage modification program and how to apply for each of them in detail. You can download now here: Mortgage Modification Guide - Start gathering all your income and expense statements and paperwork. All lenders will require that you provide them with verification of your income and expenses so they can determine what you can afford to pay, which will determine what the modified terms of your loan will be. They will provide you with a list of the exact documents you need.
- Calculate your debt to income ratios. It is critical that you become familiar with you your debt to income ratios and how to calculate them. Most lenders want your proposed mortgage payment not to exceed 31% of your gross income and your total expenses including your mortgage and all other monthly bills not to exceed 95% of your income. When a lender is considering your mortgage modification they will run their own ratios, but you need to be prepared to discuss this with them in case they do not calculate them correctly. The mortgage modification eBook provided worksheets that calculate your ratios for you if you need help. Download book now
- Complete and submit your mortgage modification package to your lender. Make sure that you have provided everything they have requested in a well organized package. Write a cover letter detailing what is included in the package along with your hardship letter. Follow up with your lender not later than 1 week from when you sent your modification package in to be sure they received it. You will then follow up every week to check the status and see if anything else is needed. It is important also ask them if your home as been put into the foreclosure process and if so, what stage it is in. If in the foreclosure process, ask if it can be stopped until the modification of your mortgage is complete.
Although these are the major steps it is critical that you prepare your loan modification package in an organized manner so the underwriter can clearly understand what you have sent them.
To receive a Free Chapter from our eBook on How to Write Your Hardship Letter and 7 Actual Letters you can have it emailed to you here: Free Chapter
We have written an eBook that uses all the same techniques we have used to negotiate hundreds of mortgage modifications for our clients and for ourselves personally. To download this comprehensive do it yourself mortgage modification eBook, click here: Mortgage Modification eBook