When it comes to finding help with the risk of foreclosure, mortgage modification can be a good solution. However, successfully obtaining one from your lender isn’t always easy. Luckily, there are a few things to know that could boost your chances at modifying your mortgage before debt troubles arise.
Preparing For Battle
The first thing you need to know about mortgage modifications is that they aren’t given out to everyone. Many lenders carry strict credit score requirements when considering a mortgage modification application. Therefore, having poor or damaged credit could reduce your ability to be approved. One way to avoid credit damage is to always be timely with payments, on your mortgage and other debts.
Similarly, applying for a mortgage modification before you miss a mortgage payment is likely to increase your chances at approval. Many lenders are hesitant to work with borrowers who are already in default, which makes them a continued lending risk. Therefore, contact your lender at the first sign of financial trouble to apply for a modification.
Also, have an idea of what kind of modification you will need going into the application process. Discuss the different modifications with your lender to determine which may be the most helpful. Do you need a temporary suspension or lowering of your payment until your financial hardship passes? Or would a lower interest rate or extended loan term help you lower your payments over a longer period of time? The main idea is to know what your budget limitations could be and how much you can afford to pay to maintain a modified mortgage when you apply with your lender.