How To Modify Your Loan, Lower Your Interest Rate And Keep Your Home
Loan Modification is the most effective tool you can use if you are facing a financial hardship and are having a difficult time making your mortgage payments. With a home modification, your loan is restructured so that is more affordable and will fit your budget. This is accomplished by either reducing the interest rate, reducing the principal balance or a combination of both. The terms of your loan can also be increased, from say 30 years to 40. In addition, if you have any late fees they can also usually be waived or added on to the loan balance – a home saver if you are a couple months behind and would not be able to come up with the money!
The bottom line – a good mortgage modification will allow you to afford your mortgage payments and help you avoid foreclosure.
Can you do this yourself?
Sometimes! BUT, do you want the best results possible? You have to realize that your lenders loss mitigation departments are trained to get the most money out of you that they can. You cannot just call them and expect to get the lowest interest rate possible! (Contrary to popular belief, this is 1%, not 2%).
Many homeowners have successfully negotiated their own mortgage modifications, but you must understand that there is a ton of work involved. In addition to preparing the huge stack of paperwork you need to send into the bank, you must also diligently follow up with the bank on a weekly basis. You must also be prepared to continuously send in the same paperwork over and over again (I.E. your last 2 months bank statements, current tax returns, etc.) as your lender will likely lose it. Anyone who has worked on a loan mod can vouch for this.
Lenders are so backed up with files right now, even if you do make through the mess and get a mod approved on your own, chances are it won’t be as good as if you hired an experienced modification company/attorney to negotiate for you. But, if you are willing to do it yourself, just be prepared for all the work that is involved. It’s like having a part time job.
When To Consider Getting Help
On the other hand, there are many professionals who have worked extensively with loan modifications know what the process entails, how the system works and how to get you a payment that is going to help you. By this, I mean an agreement between you and the bank that actually lowers your monthly payments so you can comfortably afford them. Many modifications end up with homeowners having to pay higher mortgage payments than before (as is the case when an interest only loan goes to a 5% interest loan) and that really isn’t going to help someone who is struggling to make the current payments, is it?
When you use a loan modification company to negotiate on your behalf, you will have to pay a fee. However, often times this fee will pay for itself in your mortgage payment savings over just a few months time. Negotiators 
also know how to put a complete packet together according to your lenders guidelines to speed up the process. Remember, time is of the essence! PLUS, these companies can perform these services before you pay any fees, so there is no risk to you. This is due to the recent law changes by the government to stop companies from charging upfront fees before a modification has been completed (accepted by the lender).
Many times, the companies we have reviewed can help you even if you have been denied a home modification in the past. Especially, if you were denied trying to do it yourself. More often than not, homeowners just call up their lenders and say they need lower payments. They are transferred to the loss mitigation department and are asked a series of questions… one wrong move here and you are denied. That’s why it’s very important to go over all your financial information and make sure it fits into the guidelines before you contact your lender for help.
Be careful! There are many scammers out their trying to prey on the misfortune of others. Don’t let this be you. Can you imagine paying a company to do your loan mod and then finding out months later that they did nothing and you are losing your home??? This happened much more frequently in the past then currently (2012), but it can still happen.
We have compiled a short list of reputable loan modification companies that have completed many successful mods on the homeowners behalf and can show you examples of these as well. This is crucial when choosing the right company. Do you want a “modification specialist” who has attempted a couple loan mods out of their apartment or a reputable company who has hundreds or even thousands of homeowners? Call and ask them for examples from your specific lender! See what they have obtained for others in your situation so you can know roughly what to expect. Every situation is different, but this should give you an idea of what to expect. The calculator to your right can also tell you what to expect and if you are a good candidate for these programs.
A reputable company will pre-qualify you before they take you on as a client. They know what the lenders require and will only take on clients they can help.They can guide you in the right direction if these programs are not going to be a good fit for you.
All of the companies we have reviewed can provide you with information on their business, i.e. their credentials and referrals from previous clients. The companies who use attorneys can also give you information on them so you can do research and make an informed decision. Just ask them!
Special Note: Beware of TV and radio ads for mortgage modification. Many times, these are just generic ads run by lead generation companies. They route your calls to whoever pays them for leads, so who knows who you will talk to when you call! The sites we reviewed are maintained by the actual companies and only they will call you back. You WILL NOT get bombarded with 15 phone calls from 15 different companies if you fill out their contact forms like other websites out there!
Visit our Loan Modification Company Reviews.
For those who want to go at this alone, we have prepared a guide to assist you in the steps you need to take when applying for a loan modification with your lender.
How To Qualify For A Loan Modification – Step By Step Guide
We have put together a series of posts to help homeowners who are trying to negotiate with their lender on their own. This series took a long time to put together and post online, so give us a +1 below if this helped you!
1. How Can A Loan Modification Help Homeowners – Learn the various ways a mortgage modification can help homeowners. They do more than just lower interest rates!
“Here’s a common scenario with many homeowners who eventually lose their homes.
The original monthly payment was manageable and mortgage payments were made with no problem. Then over the course of the loan the interest rate increases. Unfortunately, in many cases salaries do not increase at the same rate. Then there are other household bills that must be paid. Including medical expenses not covered by insurance. At some point in time, the ability to make the monthly mortgage payments becomes more and more difficult. Eventually, a homeowner stops making the payments completely.
To help a homeowner in this situation, a mortgage mod that reduces their current interest rate lowers the monthly mortgage payment so they can afford it.”
2. Steps To Take When Applying For A Home Modification – Learn all the steps you must take to increase the chances of getting your modification approved. Excerpt:
” One of the most common reasons homeowners are not approved for a loan alteration is because they failed to fill out the paperwork completely and accurately. Your lender already knows you can’t make your current payment. Read More…
Mortgage Loan Modification Calculator – Estimate Your Monthly Savings
Many people want to get a home loan modification, but have no idea how much money they will save if they were to be approved. Don’t waste your time, read on…
The fact is, many homeowners payments actually go up with a modification. A typical scenario goes like this: A person got their loan a few years ago and it was an interest only loan. The loan is about to adjust, so they realize their payments are going to increase. They apply for a modification and after weeks of paperwork and calling their lender they learn that their new payment is going to increase with a modified loan, not helping them at all!
Why? Because the new loan terms give them an interest rate of say 4%, which we all agree is higher than 0%, making their payments go up.
Another scenario is where the homeowner does not have their property taxes and insurance impounded into the loan. When you get a modification, these are included in the payments, making your monthly payments higher than they were before.
Well, for those people who are looking to modify, they can now use our free loan modification calculator and determine how much they will save before they apply. You just enter in a few details (you should know these off the top of your head, no need to search through paperwork) and our mortgage modification calculator will tell you if you would qualify and how much your modified payment would likely be.
The calculator uses the Governments Home Affordable Modification Guidelines to determine your payments. There is no guarantee you will be approved for this program, but many lender do participate in it. Many lenders have their own in-house modification guidelines which are usually pretty similar the the governments program.
Here is the Mortgage Loan Modification Calculator:
Click the continue button above to input your data, the next page shows your monthly savings! Read More…
Loan Modification Company Reviews – Experienced Companies Can Help
Here are the latest loan modification companies we have reviewed. As with any important decision, it is always best to speak to with different parties and get each ones individual opinion and advice. We recommend you contact these companies and choose the one you feel most comfortable with.
Only these companies will contact you when you fill out the form on their websites. You will not get calls from multiple loan modification companies. If forms scare you, just call them!
#1. BestMortgageLoanModification.com is a great place to start if you are looking for a reliable mortgage modification company.
The owner is extremely knowledgeable on all aspects of the entire modification process and even if you don’t end up using them for their service, it is definitely worth a call in just for the advice!
Why does someone want to use a home loan modification company? Well, they either want an expert to negotiate the lowest interest rate possible or they don’t have the time it takes to apply for a home modification. Sometimes, it’s a combination of both.
When you get a good loan mod, your interest rate can drop as low as 2% with a payment cap of 31% of your net monthly income. This offers homeowners significant savings when compared to their current mortgage payments in most cases. This is the goal when they submit your application!
This company has programs that can modify loans with all major lenders. In fact, I doubt there is any lender they haven’t worked with.
After analyzing your situation, they will verify if you are qualified and will be able to calculate a new payment estimate under current lender guidelines.
This will allow you to find out if a mortgage modification is going to help you afford your monthly payments or not. If the answer is yes, you can then decide to proceed with no upfront fees.
Are you facing a foreclosure sale date? They have various programs to stop your foreclosure and you do not pay unless the sale date is postponed. Best of all, it’s affordable!
Don’t wait – call 888-762-1150 if you have a sale date on your home. Time is of the essence in these matters.
Many homeowners are looking for a way to reduce their principal loan balance. This company is up to date on all the latest principal reduction programs available with all lenders, as these have become slightly more common in recent months. But you should never go into this process expecting a principal reduction. They are pretty rare, the main goal is to reduce your payments to an affordable level.
Some homeowners may also qualify for an FHA Negative Equity Refinance Program or the new HARP 2.0 Underwater Refinance Program. This will eliminate the need for a modification, can lower your interest rate into the mid 4% range and in some cases the closing costs can be rolled into the loan. Fill out the form on their website or call their toll free number to see if you qualify for these exciting programs!
BestMortgageLoanModification.com has been around for 5+ years. Excellent programs and the ability to deliver results make this company the #1 choice!
No upfront fees
Online qualification form
Many successful modifications completed
Several options for homeowners to choose from
Completely confidential, no obligation
Visit Best Mortgage Loan Modification and see if you qualify or call 888-762-1150.
2. HowToGetALoanModification.org is a must visit if you are serious about getting results
with a home modification! This organization is the one to turn to regardless if you are just getting started
or were denied.
Upon request, they can show you documentation of recent successful mortgage modification approvals,
including principal reductions. Most can’t show this because they don’t have it!
They have tools that typically aren’t available to consumers that show the Lender why it is in their best
financial interest to modify. They have learned proven secrets of the mortgage modification industry after
years in business and can share those with you if you prefer to do it on your own for your first time or
next attempt, potentially savings you thousands of dollars in professional fees.
If you are current or behind these tools are invaluable, can expedite the process and get you a more
favorable response!
HowToGetALoanModification.org offers you a risk free analysis (no upfront fees) and will only move
forward with you as a customer if confident you will be successful, which is why they are our top choice.
Even better than no upfront fees is a performance based program; where if you do not get an
approval you do not pay! The good news is this organization has a very high success rate with their
programs and you will discover relief working with their experienced mastermind team.
Other features of this organization and programs they provide access to are:
1. Performance based modification program, where if you do not get a loan modification approval,
you do not pay for the service!
2. Feel like you were a victim of predatory lending? Get a forensic audit done to discover
violations.
3. Did your Lender sell your loan? Get a Securitization Audit to see if there is a “break in the chain.”
If the Lender does not have title they cannot foreclose!
4. Loan Disposition Reports available, which takes the mystery out of eligibility and is the best
proven tool for getting a modification approved; you no longer have to resort to hope when you
are using the same analytics that the Lenders use!
5. Experienced Paralegals and counselors are available to discuss your options.
Call 888.912.9631 to speak to a representative.
Not all customers are acceptable, so contact them today to find out. You can speak with an expert and
get your free analysis after filling out their short form, or call 888.912.9631 24 hours a day!
Visit How To Get A Loan Modification
3. NoUpfrontFeeLoanModification.org has been in business for many years. Since their inception, they have never charged upfront fees to their clients. Read More…
Principal Reduction Programs – What Are Your Options?
Principal reduction programs are a highly sought after option for homeowners who find themselves in an “upside down mortgage.” There are a lot of scared and frustrated homeowners doing everything they can to keep their homes.
Before we get into the particulars, just so we can make sure we’re on the same page, let’s take a look at the most common reasons homeowners like yourself may need to look at a program like this as an option – when their mortgage is upside down.
What Exactly Is An Upside Down Mortgage?
This happens when a home has negative equity. When the real estate market collapsed in the U.S. a few years ago, the buying frenzy came to a screeching halt. It even became hard for people with good credit to purchase a home. With many homes on the market and not enough buyers, the market dropped drastically leaving home values much lower than before. This created many U.S. mortgages with negative equity problems. And when you have no equity, you cannot refinance.
Here’s an example of an upside down mortgage.
For example, you bought a home in 2005 for $300,000 and put 30,000 down. Your principal balance was then $270,000. By 2009 it was worth $175,000 and your principal balance is now at $250,000. You are now upside down $75,000.
If any of the above sounds like your situation, you can breathe a sigh of relief. At least you know you’re not alone. Okay, so now let’s get into the details of how to reduce your mortgage principal, how these programs work and what you may want to consider.
What Are Principal Reduction Programs?
In a nutshell, this kind of program reduces the mortgage back to a balance that is more in line with the current value of the property. So referring to our previous example, the new principle amount would be based on the $175,000 value. Essentially getting rid of the negative equity and also allowing you the homeowner to be able to make your mortgage payments.
Some lenders have programs that can do this once the modification is approved and others can do a balance reduction in steps, say over 3 years time.
We have seen this happen with Wells Fargo, where each year a certain percentage is knocked off the loan balance. This is pretty cool, you make your payments on time and your mortgage balance shrinks…
The Principle Reduction Alternative (PRA)
Homeowners may reduce the principle on their mortgage via the Principle Reduction Alternative program if they qualify. How do you qualify? Read More…
Loan Modification Programs That Work – An Overview of Options For Homeowners
There are many different types of loan modification programs out there today.
For the most part, you have a couple options depending on your lender. These are outlined below.
Almost every lender has an in-house mortgage modification program. This is simply your lenders own program that is approved under their own guidelines. Every lender is different, so every in-house program is a little different as well. They are often very similar to government programs described below. Most people apply for a government program with their lender and if that is rejected, apply for the in-house loan program.
There are also a government sponsored loan modification programs. These guidelines were set by government agencies and are used by many lenders, but not all participate.
Watch the video to your right if you are thinking of a government program or have been offered a “trial” loan modification. It is a great eye opener for homeowners.
Clearly, you can tell from this video that the banks are not always on your side. Be very wary of any home modification program you are approved for by your lender, especially of ones that include “trial” payments. It is always a good idea to have an attorney review your agreement before you sign it if you are doing this on your own.
With the government programs, if you qualify your monthly payments are reduced to 31% of your monthly income. This is accomplished by reducing your interest rate as low as 2%, extending the length of your loan and reducing your principal balance.
The government programs are the most sought after programs available. For those who do not qualify for these programs (for example your mortgage payment is already less than 31% of your monthly income), an in house lender option is usually the next step to take.
Now, while some people were affected negatively in the above video, there are many thousands of people who have been approved and have modified their mortgages. Here are some of the programs they have personally used: Read More…
No Upfront Fee Loan Modification Companies And How They Work
Are you looking to get a home modification, but don’t think you can do it on your own?
This happens all the time and loan modification companies can be a big help. The problem is, some companies want to charge upfront fees to perform their services. What happens if they don’t get your modification approved or their company goes out of business? You don’t want to know!
The solution is to choose a company that does not charge upfront fees. This way, you only pay if your mortgage modification is approved. If you qualify, they will be able to get you into the program for your unique situation. This usually means, the lowest possible monthly payment so you can once again relax.
The best companies can use this business model because they know how to get home loan mods approved. They just have to pre-qualify you to make sure you are a good candidate for a modification before they can take you on as a client. This process typically entails asking you a series of questions to see if you fit into the proper modification guidelines. Do you have a financial hardship? Has your interest rate increased? Is the home your primary residence? These are all the types of questions they must ask you. Read More…
Behind On Your Mortgage Payments? Here Are Your Options
If You’re Behind On Mortgage Payments – A Loan Modification Plan Could Help You Save Your Home
The economic climate in the U.S. is putting a financial strain on many households. Many homeowners due to a variety of reasons…including job loss and the inability to find new… jobs are finding themselves late on their mortgage. Still others are gainfully employed but the cost of living and other expenses keep rising at a faster rate than their salaries.
The American Dream of home ownership is becoming a “nightmare” for many homeowners. Most are terrified at the possibility of losing their home.
If you are struggling to pay your mortgage you should consider looking into getting a loan modification. This may be a viable solution to your problem. In fact, most lenders will only offer a loan modification to those who are behind on their monthly payments!
What Is A Home Modification?
Basically a loan modification allows the terms of your mortgage to be changed to make it easier for a homeowner to continue to pay a mortgage by reducing your monthly payment. For example a lender may reduce your interest rate, offer you a different kind of loan or even change the length of time you have to repay. Read More…
How To Get A Wells Fargo Loan Modification Approved
Many homeowners in the U.S. simply could no longer continue to pay their mortgage with Wells Fargo. Many of these homeowners tried to get a home modification to reduce their monthly payments. Others chose to do nothing at all and just let their homes fall into foreclosure.
The problem is quite prevalent today in America. Several lenders and servicers are in the midst of lawsuits for alleged predatory practices. The stories are almost identical from one lender and servicer to the next. Allegedly, lenders and servicers purposely made the modification process appear to be working for homeowners. Even going so far as to telling them their applications were fine and that there was nothing to worry about. Never telling the homeowner how the loan modification really works. This has not been the case with Wells Fargo (as far as we know), they seem to really help homeowners in need if you follow the right steps.
In fact, I personally know people who have had a really easy time getting Wells Fargo to modify their loans. They did their research, prepared their documents the right way and were accepted into the Wells Fargo mortgage modification program without any problems at all.
One person I know must have had lady luck on his side, because he not only received one Wells modification, but TWO! After losing even more income during the initial home modification, he applied and was granted a second modification. The second modification actually brought down his principal balance over the course of three years. It was the first time I had ever heard of such a program and I applaud Wells Fargo for offering it out. The homeowner was EXTREMELY happy, he told me “Lucas, I just got the best loan modification anyone has ever seen”. I don’t know if this is an isolated case, or Wells is actively pushing principal reductions, but lets keep our fingers crossed that they keep this up. Read More…
Are You Trying To Get a Wachovia Mortgage Modification Approved? Must Read Info…
The Wachovia Bank is one of a number of banks that currently have many loans in default. To combat this problem, they have embraced loan modification programs to help struggling homeowners. The Wachovia Bank provides these services to its loyal and eligible customers to help them end their financial struggles. They offer in-house programs as well as government sponsored programs.
Wachovia is of of the few banks that are known for actually getting mods done relatively fast. This not only helps homeowners stay away from foreclosure, but also helps the banks reputation. There are many borrowers that had been unsatisfied with their mortgages or had been unable to pay the mortgage anymore. Wachovia responded and updated their mod programs. Now the bank is all prepared to be able to analyze and approve modifications. This doesn’t mean that you should rush to call them and try to get approved, you must first do some research and get your paperwork in order.
What kinds of programs do they offer?
Wachovia mortgage modifications utilize both government and lender specific programs. Both of these are relatively similar to qualify for. They even have a few programs that do not require as much paperwork, which shows they are open to modifications and willing to help. Read More…
The Obama Loan Modification Program Explained
The Obama Loan Modification program has been in effect for a number of years now. Billions of dollars were set aside to assist homeowners with mortgages they can no longer afford, and to stimulate the economy. But, millions of homeowners have yet to take advantage of this loan modification program.
What Is The Obama Loan Modification Program?
It was created in 2009 to help homeowners reduce their monthly mortgage payments and avoid foreclosure. The initial goal was to help 3 – 4 million homeowners with their mortgages. That is still the goal today.
If you are qualified, this program may help you to lower your mortgage principal, lower your monthly mortgage payments and lower your interest rate.
The biggest snag has been qualifying homeowners for loan modifications. In a recent speech President Obama announced he would work with various federal agencies to make the program easier for more homeowners to qualify. As it stands, the current qualifications required still apply. While many homeowners have been helped out by this program, there are millions more that still need help.
Should You Still Apply For The Obama Loan Modification? Read More…
Loan Modification Tips To Increase Chances of Approval
If you’re considering a loan modification to keep your home from going into foreclosure, now is an excellent time to begin the process.
It may seem like a daunting task at first. You may even feel overwhelmed and have no idea where to begin. But the most valuable loan modification tips center around providing the proper documentation.
In order to increase your chances of getting approved it is absolutely imperative that you provide all of the documentation the lender requests.
Be Sure Your Application Is Complete
This may seem obvious to most, but it’s common that someone will fail to fill out their loan modification application completely. This can grind your application process to a screeching halt. In some cases your application can be denied. Double check your list of required paperwork and make sure you have sent it all in.
What Documentation Should You Have?
- Hardship Letter
- Documents to back up your financial hardship claim.
- Federal income tax returns and W-2′s for the last 2 years (This can be obtained electronically once you give permission by filling out the required form)
- Pay stubs
- Income Expense Worksheet
This is by no means a complete list. It is provided to give you as a general idea of the kind of documents you will be required to have. You should consult with your lender for a more complete list.
Before You Apply Make Sure You Know Your Debt Ratio Read More…
