Loan Modification
Do It Yourself
By Rey Berona
You may be like the thousands of homeowners across the country who simply do not have the few thousand dollars to pay a loan modification company. You have the time and patience, but not the know-how of doing your own loan modification.
How can you be successful with a do it yourself - and how do you get started to get the help you need? The secret to successful application approval is presenting your case in a manner that meets your lenders guidelines and fit within their loan modification policies. Loan modification attorneys and companies will tell a homeowner that they will get better results if they pay an attorney or a company to represent them, (of course-they want your business) but that is not always the case.
To be successful, the first step is to learn what it takes to qualify and how to meet those qualifications. Here is a brief outline of some of the most important aspects of an acceptable application:
Presentation - Each lender has their own loan modification guidelines and policies. You will have to take the time and effort to educate yourself about how the process works, learn what your lender is looking to see in a an application to approve it, and what the various options are.
Debt Ratio - How much do you owe compared to your income. You and your bank will determine a new "target" payment that will be a percentage of your gross monthly income. For example, the new payment cannot be no more than 38% of your gross monthly income. So, if by a combination of lowering the interest rate reduction, getting a longer loan term or doing principal forbearance you can reach that percentage, you will be a good candidate for a successful loan modification.
Disposable Income - How much do you have to spend every month? Every loan modification application will include a financial statement and is a detailed breakdown of your income and expenses. You must show that when you are calculating your new lower loan payment, the rest of your bills and expenses against your monthly income, that you still have money (maybe $300-500) left over. This will assure the bank that you have extra money and you are not a risk of getting behind on your payments, if granted the loan modification.
Hardship Letter - How did I get into this financial hardship? A detailed explanation of your situation, why you want to keep your house and your plans for the future will help your lender understand how and why you are facing payment difficulties. Make your letter to the point, but with enough documentation to back up what you say (medical bills for example). A well written hardship letter is an important part of a successful application.
One who takes the time to research, learn and prepare can be successful with a do it yourself loan modification. As knowledge is power, the more you know the better your chances are. Many companies or even attorneys who claim that they can do it better are brand new at loan modification, a term not so common a few years ago. They don't have the motivation to work as hard as you do-it is your home after all and you have the most to lose and the most to gain. A loan modification company or attorney that gets paid up front will not have the same motivation to get a successful loan modification as the homeowner who is about to lose their home.
You have to be persistent and patient-even if told no the first time- simply refuse to give up. Many lenders are debt collectors or servicing company and they are put their interest first. Don't take it personally and don't give up until the a successful loan modification is reached. Remember also that they do not want a foreclosure. It will cost them a lot of money to go though with a foreclosure.
There is a tremendous amount of information online about loan modifications. It can be confusing and time consuming to try to collect all the information you need to learn. A good idea is to purchase a low cost, comprehensive guide that will give you the information you need. The guide should include the required forms with detailed instructions on how to complete them properly. Examples of well written hardship letters should also be included. There should be information on negotiating tips to use when working with your lender or a loan modification company. Examples and how to calculate your debt ratio to pre-qualify yourself is a must in the guide.
Whether you decide to hire an attorney or a company or Do It Yourself, your loan modification is too important to leave to chance. A complete how to guide handbook is a "must read" for a homeowner who is considering a loan modification to avoid foreclosure.
Do It Yourself Guides, Click Here Find Out If You Qualify For a "No UpFront Fee Loan Modification" - Pay Only For Results: http://No-UpFrontFee-LoanMod.com |