Qualifying for a mortgage loan modification is a bit of a process. It can take four months, maybe two, perhaps even 12 in extreme cases. Each case is treated differently and your own ability to qualify comes down to the details of your situation.
Factors for Qualifying
With programs like Making Home Affordable, the process is getting more streamlined and there are a few things we can look at to make a very good preliminary determination with regards to someone’s eligibility.
- Proof of hardship: Being able to show some kind of financial hardship is vital to your loan modification case. Lenders want to know that extenuating circumstances caused you to miss payments or have trouble affording your mortgage as it currently stands.
- Ability to pay back the modified amount. No lender will give you a modification if the numbers suggest you still can’t afford a reduced payment. Your financial worksheet that details your income and expenses tells a very important story.
- High debt to income on your mortgage payment. What you pay on your mortgage every month including taxes and insurance typically needs to exceed the level of 31% of your gross income.
- Late Payments. Like it or not, someone who has missed a payment often gets the attention of the lender first. However, it is never advised that you miss a payment on purpose.
Lenders will have their own set of guidelines as well as a few others imposed by the Making Home Affordable plan. Talk to someone knowledgeable about loan modifications and see what your options are. It can be complicated but it’s not impossible with the right amount of help.
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