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Mortgage Assistance : Tips for Shopping a Loan Modification

If you are one of the countless American families that is facing foreclosure or is struggling to make the mortgage payments, it is understandable to be going through a lot of stress and worry right now. You may be looking for someone that you know that you can trust to turn to who may have some answers to help you out in this tough situation. Well there is help and here are a few real world tips to help you stay in your home and prevent foreclosure.

First of all, if you have a good relationship with a trusted mortgage adviser, such as a loan officer, you can call them and ask them if they are doing loan modifications, or if they know someone who is.

Take a look to see if they have a website for the company and make sure that the owner’s names and faces are preferably on the website. This is called accountability, “where does the buck stop ? ” so to speak, you want to know these things when dealing with a loan modification company.

Ask how long the company has been in business and find out what kind of modifications they have done. You will want to ask them to define what a loan modification is. A good definition of a loan modification is: A change in your interest rate that is NOT a refinance, that enables you to stay in your home for the long term.

Now this could include monies that you owe being put on the balance of the mortgage, and it might also include a month or two break in the mortgage payments to give you a chance to catch up if need be. Also, ask to see if you can meet the person in charge of the loan modification in person, or if that’s not possible, do they have a video presentation of themselves on their website?

You should ask them if they give a 100% money back guarantee, this is very important and many people don’t realize that any good loan modification company will offer one. You want to know if the loan modification company will give you your money back if they cannot succeed in modifying  your loan.

You will need to get pre-qualified for a loan modification which is a pretty quick and simple process if you have all your data. This data should include your mortgage statement showing your current interest rates and payment, also if whether your tax and insurance is paid out of your mortgage, and you will also need your pay stub and a financial statement outlining your monthly budget figures. In regards to the financial statement, that should include all of your expenses , including, credit card payments, car loans, groceries, clothes, home and car insurance, medical bills etc.

The key to preventing a foreclosure is to act quickly. Remember the process to qualify for a loan modification can take anywhere from 15 to 60 days, and in some cases even longer. You will need to be able to foresee your situation for the immediate future and determine if you may be at risk of facing financial difficulties to come. Sometimes it may be difficult to predict the future, however if the income for the household has decreased due to a job loss recently , or if you know your company is going to lay off people sometime in the near future, then it would be a good idea to start preparing yourself for any possible outcome.

The best way to do that is to start preparing your financial statement as described earlier, also start looking around for a good broker or adviser while you are still not under any real pressure. Prepare a list of possible lenders and brokers and set some time aside to contact them all and get as much information as you can, you will want to ask all the questions mentioned in this article.

You will also need to prepare a hardship letter. This is basically a 1 or to page description of your situation and why you would need a loan modification.

You may not be in any critical situation at this point, and hopefully you will never find your self facing foreclosure, however being properly prepared in advance can save you valuable time if the need arises, as this will be crucial in helping you save your home.