Due to the struggling economy, more and more people are preparing themselves to lose their homes. With changes in the employment status and a lowered income, many can simply not keep up with their mortgage payments. If you are facing the loss of your home, you may want to consider a home loan modification, as it is often the quickest way to stop foreclosure.
Eligibility requirements for loan modification include undergoing a hardship that causes you inability to make your current payments. This hardship may be due to sudden unemployment, divorce, a change in your income, or unexpected expenses, such as medical bills. If an individual can no show any proof of the hardship, he or she will not be eligible. They will also take into account the amount of your payment, the value of your home, and what your current interest rate is.
This program will allow the lender to knock your payments down to approximately thirty-one percent of your income. Unfortunately, due to the interest rates, many people are now paying well over this amount. To get your payment down to a reasonable amount that you can afford, the lender is able to offer an interest rate as low as two-percent. For someone paying a mortgage payment of approximately $1,300 a month, this drop in interest rate can reduce the payment by as much as $500.
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