subject: A Home Loan Modification Can Be The Answer [print this page] Owning a home is a dream of most anyoneOwning a home is a dream of most anyone. Getting to that point in your life is a huge accomplishment. Unfortunately, things happen that are unforeseen and can really throw a wrench into your financial situation. You could get injured and not be able to work or you get terminated or laid off which has been the situation for many over the past couple of years.
Losing a job, having your hours cut, or being demoted in pay are the toughest situations to handle because they are usually sudden and unforeseen. But regardless of how we feel about it, it does still happen way too often. This can really make it hard if not impossible to continue paying on the things you have like a vehicle or even your home. Even though many may feel helpless when it comes to falling behind on payments, there are things you can do to change the situation to keep you from losing the things you have worked so hard for.
Some may suggest a loan modification or refinancing your home if this situation occurs. Refinancing however can be very difficult to do when the situation is due to financial hardship. Refinancing is basically finding another lender at a better rate or a longer term to reduce the amount of your premiums so you are better able to afford them. The problem is that a new lender is not going to feel comfortable loaning you the money if you are experiencing financial problems. It can be done and has, but it is just not very likely. It is more of a situation for someone with solid financial ground to save a little money by reducing their interest rate.
For someone experiencing financial issues, a better alternative is to seek a home loan modification. Also known as mortgage loan modification, this is where you actually keep the same lender that you have now but they change the terms of the loan to help you stay in your home. Many lenders are reluctant to do this but once they understand the alternative such as bankruptcy or foreclosure, they become more willing to help. They know they will not get near enough money to cover the loan by taking the house from you and selling at a foreclosure auction.
A home loan modification has helped many people be able to keep their home. While the same lender is kept, they can reduce your premiums by changing the interest rate or by lengthening the term of the loan or in some cases they can do both. Whatever it takes to lower your payments and keep you in the home really is in their best interest, so they will modify the loan to accomplish that.
If you think you have no other option, try looking into a mortgage loan modification to see how it can benefit you. Hopefully your financial hardship is only temporary and it will help to show them that, this way they are more likely to do a home loan modification for you if you will be back on your feet sometime soon.
