Frequently Asked Questions

Most frequently asked questions about loan modification programs:

1. What is a loan modification?
2. Why would my lender be willing to do this for me?
3. How do I know if I qualify for a loan modification?
4. How do I show my lender that I will be ablet to make the new house payment if they modify my loan?
5. Can payments that I have missed be added into the new modified loan?
6. How much does a loan modification cost?
7. How do i know if I qualify for the Obama loan modification program?
8. What if I owe more than my house is worth?
9. What if I am unemployed, can I still qualify for a loan modification?
10. I am unfamiliar with with how mortgages work adn what to say to my lender when I call them about a loan modification. Can I really do this myself?
11. How do you recommend I get started on my own loan modification?

Answers

1. What is a loan modification?

A loan modification offers a change in the terms of your existing mortgage resulting in an affordable and sustainable monthly loan payment. The loan modification may include a reduction in the interest rate, payments only on a poriton of the loan, a longer loan term, and sometimes a reduction in the principle balance.

2. Why would my lender be willing to do this for me?

Your lender is willing to offer a loan modification to you if it serves their best interest. Meaning, the lender will agree to a loan modification if it is more cost effective to modify your home loan so you can afford to keep making payments as opposed to the cost of a foreclosure. Not only are lenders overwhelmed with record high foreclosures, and with the continuing decline in home values, but most now have pressure from the Federal Reserve to help homeowners. In most cases the lender will probably lose more money foreclosing and trying to sell your home than if they take a loss on the loan, because you keep making loan payments to them.

3. How do I know if I qualify for a loan modification?

The number one deciding factor for your lender is your ability to afford the new payment, now and in the future. You have to show the lender that based on your income and expenses, you will be able to sustain the new house payment. We show you how to do this in detail in our Step-by-Step Loan Mod Ebook.

4. How do I show my lender that I will be able to make the new house payment if they modify my loan?

The lender wants to see an accounting of all of your monthly expenses and your monthly income. You must calculate your debt ratio so that your new housing expense (taxes, insurance and HOA included) do not exceed a certain percentage, which is your housing DTI. In our Step-by-Step Loan Mod Ebook we provide downloadable forms and interactive worksheets to help you calculate and present this to your lender.

5. How much does a loan modification cost?

A loan modification is free! Many 3rd party companies charge fees in excess of $1500-$3000. If you don’t have the time and its worth it to expedite the process this has worked for many people. Your best approach to getting a loan modification is to get educated, purchase our inexpensive Step-by-Step Loan Mod Ebook and do it yourself.

6. Can payments that I have missed be added into the new modified loan?

Yes, in some cases your lender will add your past due payments onto your current loan balance so you can start fresh with your new modified loan. In our Ebook we will show you how to make a proposal to your lender that may include adding payments to your loan balance.

7. How do I know if I qualify for the Obama loan modification program?

The Obama program was designed for homeowners who are having a hardship on their primary residence and for loans under $729,750. Additionally, you must have received your 1st mortgage loan before January 1, 2009. The program also requires that your debt to income ratio based on your housing expense be at a certain level, which is the tricky part. in our Step-by-Step Loan Mod Ebook we walk you through how to get to the correct DTI using interative forms and worksheets.

8. What if I owe more than my house is worth?

You are not alone. The majority of people who are in need of a loan modification have loan balances greater than their value, which can work in your favor. Your local realtors can provide a Market Analysis for you or you can use the free resources we provide in our book to determine your own value. You will use this information to ask your lender to reduce the amount you currently owe them as part of your loan modification proposal based on this lower current value.

9. What if I am unemployed, can I still qualify for a loan modification?

In most cases yes, but you still need to show the lender that you will have the income necessary to pay the new loan payment. If you have a VA or FHA loan, there are some loan modification programs that will give you time to find a job before you start making payments again.

10. I am unfamiliar with how mortgages work and what to say to my lender when call them about a modification. Can I really do this myself?

Armed with the right tools and a little background on what lenders want you can step through the process yourself. Lenders are experiencing much more pressure now then ever before to not only work with homeowners but work to complete the modification for them in a timeley manner. Most lenders have a special department set up just for this purpose. Thousands of homeowners have taken it upon themselves to fight for their home and successfully modified their own loans and reduced their payments, you can too! Our Step-by-Step Loan Mod Ebook will show how to do this in easy to follow steps and examples.

11. How do you recommend I get started on my own loan modification?

You need to start by calling your lender and finding out the right department to talk to and then follow our Step-by-Step Loan Mod Ebook. It is important to get the most up to date and complete information you can so you will present your loan modification application properly and have the best chance for approval.