If you are a homeowner currently facing a financial crisis, most likely your first consideration is keeping your home. In researching loan modifications, you’ve most likely come across various home loan modification qualifications. The truth is, you most likely won’t know whether your qualify until you actually apply for a loan modification and discuss the possibility with your lender or home loan modification attorney. In this piece however, you can learn the types of information the lender is likely to examine in reviewing your application:
A statement showing your willingness to keep your home – Your lender, whether it’s a bank or a home mortgage company, is absolutely interested in seeing that you are committed to a long-term solution.
Hardship Letter – A bank needs to know that you are in financial duress. Hardships can include the loss of a job, reduction in pay, medical issues, sudden interest rate spike (i.e. from a subprime loan) and more.
Your ability to pay a lower monthly payment – Lenders are going to want to know that although you weren’t able to make your past monthly mortgage payment, you can make a lower payment. This loan modification qualification is one of the most important, because it proves you can keep up your part of the loan modification bargain. This means that whether your monthly payment is lowered by dropping the interest rate, spreading payments over a longer period of time or reducing the principle home loan balance, you can make continued payments over time.
Supporting Documents – This includes W-2’s, current credit reports, pay stubs, federal income tax returns, bank statements and more. This loan modification qualification demonstrates your income and financial situation over the last few years. Banks and lenders are going to want to see that while you may be having some hardship at the moment, you can handle the financial strain on some level.
Important Factors
Another important factor for the loan modification qualification process is your debt ratio. Your debt ration is basically measuring your total monthly payments versus your gross monthly income. Although your lender may have different guidelines, the Federal Housing Administration recommends that your back-end ratio not exceed 41 percent and your front-end ratio not exceed 29 percent. Basically, you have to have more money coming in every month than you have going out. This loan modification qualification is a pretty good guideline to follow to determine your new, lower monthly mortgage payment and whether it will be truly affordable.
Remember: You want to qualify for a loan modification only if the modification is going to leave you with a truly affordable monthly mortgage payment. You don’t want your lender qualifying you if the loan modification is simply going to put you back on the path to losing your home.
Contacting a qualified home loan modification attorney will help you keep your home and will guide you through the loan modification qualification process in an easy and concise way.
Visit us at http://www.loanmodificationhelpcenter.org/ or call 800-359-6941.
Legal Disclaimer The information contained herein is provided for general information and advertising purposes only and is not intended to convey a legal option nor legal advice for any particular case or situation. Nothing in this article shall create an attorney-client relationship. Nothing sent to this law office via e-mail shall constitute an attorney-client relationship. Nothing contained in this article shall be construed to be a guarantee or prediction of result. Prior results are provided for general information purposes only and do not guaranty, warranty or predict a similar outcome with respect to any future matter. Results achieved depend on individual circumstances and not everyone will qualify or be successful in restructuring their mortgage loan.
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