There are certain basic requirements to qualify for a loan modification, although you should keep in mind that different lenders and mortgage companies have their own criteria. If you have a desire to stay in your home, are experiencing financial hardship, and are able to afford lower monthly payments, then you are likely a good candidate for this type of loan.

The main criteria that your lender will consider is whether or not you will be able to make the modified payment now and in the future if your new loan terms are approved. This means that you will need to produce proof of your income, and a financial statement that details your income and your expenses and shows that you will be able to afford your new lower payment.

Even if you are not delinquent currently, some lenders do take applications from homeowners who can prove that once their interest rate increases they will no longer be able to afford their monthly mortgage payment. In other words, there is no reason to wait until you are delinquent to begin the process.  You should inquire early to see what your options are and remember that every lender is different.

Overall lenders and banks work with people in these situations:

1. Homeowners who have an adjustable rate mortgage or their rate is going to adjust(and they cannot refinance).
2. Homeowners who can no longer make their mortgage payment or are behind on their mortgage payment.
3. Homeowners who owe more than their home is worth or have very little equity(upside down).
4. Homeowners who are considering walking away from their home or a short sale.
5. Homeowners who have income that is less than their expenses(spend more than they make)
6. Homeowners who are experiencing a decrease in income, have unexpected medical bills etc.

This entry was posted on Tuesday, March 17th, 2009 at 5:06 pm and is filed under Loan Modification. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.