Can a loan modification help me?

Financial hardship can quickly derail your dream of owning a home. In this case, a loan modification might be a good option for you. Modifying your current mortgage can help you keep up with payments while also preventing the foreclosure process from occurring. If you're concerned about your ability to continue making payments on time, PennyMacUSA.com offers the following information. 

A loan modification entails tweaking your existing loan to make it easier to keep up with mortgage payments, which involves a few different methods. For instance, your lender might agree to reduce the principal you owe. You might also be privy to lower interest payments, which means a decreased monthly obligation. In some cases, lenders will also extend the period which you have to pay back the loan. 

There are a few important steps to the loan modification process. First, you must have a clear understanding of your current finances. This entails documenting your income, as well as establishing which financial hardships have occurred that have impacted your ability to make mortgage payments. This includes things like a death in the family, illness or injury, loss of a job, onset of disability, and any other situation that would impact your financial stability. 

Once you have the correct documents, the next step is to contact your lender. Keep in mind that virtually all lenders want to avoid foreclosure as well, as there are a number of fees and obstacles associated with that process. Your lender will then supply an application, which must be accompanied by all the pertinent documents. You'll also need to establish that you expect to recover from your current financial hardship, which shows you'll be able to keep up with the loan once it's been modified.

 

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