Applying for a mortgage loan modification : Tips for success

Why would you be behind on mortgage on your home and get into trouble with lenders? In normal circumstances, you certainly wouldn’t. But, if you are in financial doldrums and find it difficult to make payments, you may default on the mortgage. If this is the situation, you may have to opt for a mortgage modification.

Applying for a mortgage loan modification – What you need to know

What is a loan modification?

A loan modification is an outcome of negotiation between you and your lender through which you may prevail upon your lender to modify some or all of the terms of your loan. 

Mortgage modification helps in bringing your monthly payment to a more affordable level, that is, 31 percent of your monthly gross income.

Mortgage modification is a complex process. Taking the help of a mortgage modification attorney can ensure a smooth and successful outcome.

Tips for getting mortgage modification

Following these tips can brighten your chances of getting a loan modification. Let’s see what they are:

#1 Explain your problem
You may be facing certain difficulties in depositing timely payment, such as excess medical bills, family emergencies, being out of the job, and the like. If you explain these circumstances to your counselor and the mortgage company, they may take a lenient view of your payment default.

#2 Preserve your income record
It is important to preserve all the documentation that makes your total income, such as saving your paystubs, collecting your bank deposit details, etc. If you are self-employed, you need to present a profit and loss statement for the past three months or more. This documentation will come in handy at the time of mortgage modification.

#3 Collect details of your expenses
Your lender will certainly evaluate your income and your expenses to determine whether you can afford a mortgage payment. On your part, it is important that you make out a list of payments on groceries, utilities, medical expenses, loans and credit cards, insurance, car payments, child care, student loans, etc. Your mortgage payment cannot be more than 31 percent of your total gross monthly income.

#4 Don’t miss out on your federal tax returns
Federal tax returns are required to complete your financial picture. So, ensure that you have the tax returns for the past two years.

#5 Provide insurance proof
You may have to provide your proof of insurance to your lender and counselor.

#6 Present all documents on request
You should be prepared to provide all documents and information, as and when required by the lender and counselor. Delay caused in presenting your documents or providing information may delay the processing of your loan modification.

How long does it take to get approved for a loan modification?

Depending upon your lender and the efficiency of your attorney, your loan modification can get approved within 30 to 90 days.

Can a loan modification stop a foreclosure?

The good news is that a loan modification can prevent a foreclosure

. However, applying for a loan modification does not stop the foreclosure process. Hence, there is no point in applying for a loan modification near to the foreclosure sale date.

You can opt for some mortgage modification programs in Atlanta Georgia. GallerLaw, a law firm in Georgia, has helped hundreds of struggling homeowners in successfully modifying a home loan.