If you run into a financial crisis as a homebuyer and find it difficult to pay your mortgage at the current interest rate, then you may apply for a loan modification from your lender. While some lenders do not agree to this, saying that buyers should direct their efforts and resources towards completion of their stalled mortgage payment, on the buyers side it makes financial sense. Hiring a loan modification attorney can help you go about the process without much difficulty, as your attorney explains your legal rights and can even stop a foreclosure.
The main role of a loan modification attorney in this process is to help you, as a borrower, understand your legal rights, work out all the legal paperwork, and even negotiate with your lender to stop a foreclosure sale. Before you get into the process of loan modification, it is important to understand the steps involved.
The first step involved in the load modification process is your eligibility. Even before you call your lender with a loan modification inquiry, you need to verify if you are eligible for the process. In that respect, you need to have a steady income and a positive budget in order to qualify.
A steady income means you need to have an additional source, or sources, of income other than unemployment benefits to be considered. A positive budget, on the other hand, means you will be able to sort all your expenses and have extra cash left every month. To achieve that goal, you need to reduce your expenses to the bare minimum, and restructure your budget before calling your lender.
It is also important to remember that your mortgage payment is the most important thing on your budget, and should be given priority above car payments or other expenses. If you can resolve your crisis and foresee your situation improving within six months, then you can be a candidate for a loan modification.
However, if you think your situation may not improve within the next six months, then it is important to consider whether saving your home should be your primary goal. Consult with your lender about other options available that you can utilize to allow you keep your home while looking for employment.
The overall pre-qualification for a loan modification requires that you use the home as your primary residence, you have faced a financial hardship that has depleted your resources, and you are unable to continue paying your mortgage at the current interest rate. In addition, you must have a steady income other than unemployment benefits, and a steady budget. If you meet these qualifications, then you are eligible to apply for a loan modification.