Making Home Affordable loan modifications have always been around, but most people don't even know they existed until recently. Home loan modification is quickly becoming a household word, commonly used and understood by almost everyone. And yet there are many misconceptions and myths about home loan modification that are still commonly held. Myth #1: You have to be late on your payments to get a loan modification.
The Challenges- Not knowing whether or not you pre-qualify. Let's first look at what happens when you want to buy a property. You get in touch with your mortgage broker or bank, and once you answer a set of pre-approval questions and submit the supporting documents, your bank tells you upfront whether you're pre-approved, how much house you can afford based on your income, what guidelines you should follow, and other useful information. The same, however, is not true when you're trying to modify your loan. You still have to answer a set of questions to determine whether you meet the minimum eligibility requirements, and you still need to submit the necessary paperwork, but your bank won't tell you upfront whether or not you actually pre-qualify. Often, they won't even tell you in a timely manner (in my case, it took seven months before my bank got back to me). I'm not talking about the time it takes to verify your documents-banks and lenders should and will take time to validate what you have declared. But underwater homeowners who are applying for a loan modification shouldn't be put in a "guessing" position where they have to wait months just to find out whether they're pre-approved, right?
Myth #3: Loan modification will hurt my credit. It really depends on the type of loan modification you get, but in general modification will not hurt your credit. Furthermore, you aren't required to have good credit in order to obtain a loan modification. Just a steady job and proof of economic hardship should be sufficient. Myth #4: You can easily get a loan modification by contacting your lender. While you're free to try it, going it alone is not advisable. Use a financial counselor to be your advocate. Choose a counseling company with legal representatives who will work for you and know the laws better than you do. Letting them work it out with your lender will get you the best solution.
Should I hire a firm? You will see a bunch of firms that claim to be able to help you with the loan modification, saying that having an attorney on your side will boost your chance of success. The truth is that the attorney at these firms does not work on your case directly. Instead he or she hires a bunch of assistants who take your financial data, fill out forms, and call the banks on behalf of you. These attorney in these firms is a means for them to charge retainers up-front before you even know their quality of work. The assistants will not know your situation better than yourself, so they generally aren't worth the cost.
Stopping the foreclosure process on your home can be done with loan modification. There are a lot of myths about home loan modification swirling around homeowners right now, but knowing the facts can help you to stop foreclosure and keep your home.
The Challenges- Not knowing whether or not you pre-qualify. Let's first look at what happens when you want to buy a property. You get in touch with your mortgage broker or bank, and once you answer a set of pre-approval questions and submit the supporting documents, your bank tells you upfront whether you're pre-approved, how much house you can afford based on your income, what guidelines you should follow, and other useful information. The same, however, is not true when you're trying to modify your loan. You still have to answer a set of questions to determine whether you meet the minimum eligibility requirements, and you still need to submit the necessary paperwork, but your bank won't tell you upfront whether or not you actually pre-qualify. Often, they won't even tell you in a timely manner (in my case, it took seven months before my bank got back to me). I'm not talking about the time it takes to verify your documents-banks and lenders should and will take time to validate what you have declared. But underwater homeowners who are applying for a loan modification shouldn't be put in a "guessing" position where they have to wait months just to find out whether they're pre-approved, right?
Myth #3: Loan modification will hurt my credit. It really depends on the type of loan modification you get, but in general modification will not hurt your credit. Furthermore, you aren't required to have good credit in order to obtain a loan modification. Just a steady job and proof of economic hardship should be sufficient. Myth #4: You can easily get a loan modification by contacting your lender. While you're free to try it, going it alone is not advisable. Use a financial counselor to be your advocate. Choose a counseling company with legal representatives who will work for you and know the laws better than you do. Letting them work it out with your lender will get you the best solution.
Should I hire a firm? You will see a bunch of firms that claim to be able to help you with the loan modification, saying that having an attorney on your side will boost your chance of success. The truth is that the attorney at these firms does not work on your case directly. Instead he or she hires a bunch of assistants who take your financial data, fill out forms, and call the banks on behalf of you. These attorney in these firms is a means for them to charge retainers up-front before you even know their quality of work. The assistants will not know your situation better than yourself, so they generally aren't worth the cost.
Stopping the foreclosure process on your home can be done with loan modification. There are a lot of myths about home loan modification swirling around homeowners right now, but knowing the facts can help you to stop foreclosure and keep your home.
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