Most people are in excellent financial shape when they first take out a mortgage on a new home. You likely wouldn't be able to even get the mortgage if your finances were not in order. But things can change over time, and perhaps your current mortgage payment now feels like more of a burden than an investment in a piece of property. Whether you've lost your job or had another financial emergency come up, you might be looking for a way to adjust what you pay every month on your home. Luckily, this is what loan modifications are for. Here are just some of the different specific reasons to consider going down this path.
You're Willing to Pay for Longer If You Can Lower Your Monthly Payment
Maybe you've paid off five years of a 30 year mortgage, but your situation has changed so much that you can no longer afford the monthly payment that you've been making. It might be possible in this situation to get a loan modification that will lower your monthly payment but perhaps put some time back on the loan. While this is not ideal, it can help you get control of your current situation, and you should also keep in mind that there may be additional re-financing options at a later point once you have your feet back under you.
You Need Immediate Relief to Avoid Losing Your Home
Have you been served a foreclosure notice because you are late on payments? While this is a little late in the game to get started, a foreclosure isn't immediate. You will still be given a set deadline to come up with a payment or agree to other terms. Contacting a professional loan modifications expert may help you get your terms renegotiated more quickly and end up saving your home.
Keep in Mind That There Are Typically Two Approvals That Take Place
While every loan modification program is different, keep in mind that typically, you will first be approved for a trial period. This will allow the lender to see that you can handle the new payment, making it on time every month, perhaps for a period of three months or sometimes longer. Based on the results of the trial, you may then be approved for a permanent modification. Keep in mind, though, that if your finances change dramatically in some other way during the three month period, you may still be denied. In other words, don't go making any other big purchases, opening new credit lines, or tapping out your other existing lines during the trial.