Mortgage Loan Modifications – What Are They & Who Qualifies?
Mortgage loan modification
Mortgage loan modification is an agreement that exists between a lender and a house owner to change or alter the terms of a loan. In areas of residence, mortgage industries are created on a big scale to permit the owners to re-structure the financing so as to prevent the loss of their homes. A true loan modification is a lasting solution that ensures that the best interests of both the lender and the house owner are met. This leads to a reduction in the payment of mortgage to a phase that an owner can afford to pay continuously, and would also permit the owner to keep on staying in the home. Having known what a mortgage loan modification is, the next question is about those who qualify for the mortgage loan modification
Who qualifies for mortgage loan modification?
For you to qualify for a mortgage loan modification, there are 3 conditions that have to be met. These conditions would determine if you are a good candidate for a mortgage loan modification or not. These conditions are:
- You have suffered from a hardship which has made it impossible for you to continue with the regular mortgage payments or increment in payment will lead to an adjustment in the interest rate.
- You do not have enough capital to sell the home and
- You must be able to provide documentation to show that you can afford to make a proposal of modification to pay.
Why is this necessary? Because mortgage loan modification is not refinance but an agreement between the borrower and the lender. All the proceeds could be considered and taken into notice as long as it is documented. In mortgage loan modification, common sense prevails as the lender would not want to take the home back. This third condition is seen as the most important condition that must be fulfilled by a homeowner to qualify for mortgage loan modification.