If you want to modify the terms of your mortgage contract outside the original terms of your contract, a loan modification process will allow you to do so. A loan modification program may help you save your home when you are about to face a foreclosure. However, you must have the ability to meet the modified payment terms agreed upon between you and your lender. A loan modification may help you to secure a decreased interest rate, a short amortization or may even assist you to reduce the loan amount. When you decide to get help from mortgage loan modification, you must be able to negotiate with your lender profitably in order to obtain the best deal from your loan modification program. This article provides you with information about the tips in order to negotiate a loan modification.
Negotiating a loan modification
Here are some tips you need to follow in order to successfully negotiate a mortgage loan modification with your lender.
1. Assess your finances â€“ You must have a clear idea of your finances before you think of contacting your lender for a loan modification. List your expenses and your income. Find out if you are over-spending, cut extra expenses that you make. You may get help from a counseling service to help you manage your finances in a better way. Your counselor may also help you negotiate with your lender so that you may secure a good deal.
2. Talk to your lender â€“ Contact your lender and explain your financial problem to him. Describe your situation to your lender and tell him what you can offer in order to stabilize your monetary condition.
3. Proposal to pay off â€“ You must decide on how you would propose to pay off your loan to your lender. However, this initial proposal is the first step towards your mortgage loan modification negotiation process.
4. Analyze your financial strain â€“ If you feel that your financial strain would not last long, you can ask your lender to allow you forbearance or postponements of your payments for sometime. Ensure your lender that after you recover your finances, you will get back to your normal payment terms.
5. Know the options â€“ If you have an Adjustable Rate Mortgage, ask your lender to postpone the ARM for the time being. Some mortgage company will also allow postponing your ARM for almost 5 to 10 years. However, for your loan modification process your lender will ask you to provide them with your financial history and also a detailed account of your income and your expenses in order to grant you a loan modification.
However, apart from utilizing these tips mentioned above, you must also keep in mind not to fall into any scams. In order to get the best out of your loan modification, you can contact the HUD Approved Foreclosure Avoidance Counselors in your area. Thus, with these tips you can easily secure a mortgage loan modification sucessfully.