So, What is a Home Loan Modification? Do You Qualify?

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Jim has been restless for the last two months since he got laid off from his job. Even though he is very confident in his skills to acquire another job, he isn't sure if he could get the same pay as before. Though the situation is not completely out of control, he feels that the life is getting tougher and that he may not be able to handle the largest debt of his life (once thought as his largest asset), his house. One optimum option available for homeowners like Jim, who are struggling with financial burden, is to go for a Home Mortgage Modification.

So, what is this Home Loan Modification?

It is the negotiation with the lender for new terms of your current home mortgage. It could be a change either for the short term, until you get out of the financial struggle, or for the entire period of mortgage repayment. This is mainly done to reduce your financial burden so that potential foreclosure, bankruptcy, etc., can be avoided.

Who qualify for this Loan modification?

If you have lost a job, incurred unexpected medical expenses, or are unable to afford the current payment with your current mortgage then you can qualify. In spite of your best efforts, you may still fall behind on payments. A home loan modification may make all the difference!

Every mortgage institution has their own loan modification standards; however, here is the most common qualification criterion:

If the property is your primary residence and you've experienced financial hardship or a change inyour financial circumstances that has resulted in 2 or 3 missed payments and you are not purposely defaulting to get a loan modification, then you may be eligible for mortgage modification. Also, remember that you should not plan for filing bankruptcy. It is vital that you are willing to be open, honest, and provide all necessary documentation for this process. Even if you have not yet missed a payment, you may still qualify for a mortgage loan modification if you can prove you are "on the edge". Meaning, due to current circumstances, you will eventually default on your loan if you don't get some financial relief. Be truthful with the facts about your current situation.

It is worthwhile to speak with a home loan modification specialist about how to modify your mortgage. You will have better chances of retaining your home when you educate yourself about your options for doing so.
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