Loan Modification FAQs

1. How to seek / request / ask for a mortgage modification?

For availing the home mortgage modification, you have to submit to your lender the application along with the loan modification hardship letter and affidavit that justifies your incapability to pay the pending loan without financial assistance. You should include the financial statements and documents such as paystubs, bank statements, mortgage statements etc.

2. What is the best debt to income ratio recommended for loan modification?

This varies from lender to lender. Normally the lenders do not like the debt to income ratio to Exceed 45%. For qualifying for the government’s loan modification help the DTI should not exceed 38%. On qualifying for the Obama loan modification program the DTI can be further reduced to 31%.

3. Can the loan modification include the late charges?

According to HUD rules, the loan modification companies when modifying the loan have to relinquish the late charges. This is subject to the policy of the lender and the sort of loan that is availed the borrower.

4. Is the credit scored adversely affected by mortgage loan modification?

There is no scope for the home loan modification having an adverse effect on your credit score. On the contrary if you are regular at the monthly payments, you can improve your credit score.

5. Can I curtail/stop the monthly payments during the loan modification application process?

There is no need to stop the monthly payments. Being regular at monthly payment has a positive effect on the chances of approval of the mortgage loan modification.

6. What are the consequences if I default post approval of mortgage loan modification?

The benefits of the mortgage loan modification will be stopped. The penalties for default depends on the terms and condition agreed upon while availing the mortgage loan modification.

7. Are unemployed homeowners eligible for loan modification?

To qualify for loan modification program the lenders prefer candidates who are employed.

8. How much time does it take for mortgage modification approval?

The approval of mortgage modification usually takes around 30 to 90 days but this is subject to the effectiveness of the lender and the formalities complied with, by the borrower.

9. Can the terms and conditions for mortgage modification be renegotiated prior to the signing of papers?

If you have not signed the loan modification agreement papers, you have all the right to renegotiate the terms and conditions for the mortgage modification.

10. Do you have a query other than those mentioned above?

Simple! What are you waiting for?