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The Mortgage Modification Guide

Am I eligible for a mortgage modification?

There are many factors that can determin if you are eligible for a mortgage modification. Even if you think you might not be eligible, it's always best to contact an expert who can advise you. You might qualify if some of the following apply:

  • You have a high interest rate
  • You are upside down (house is worth less then the original cost)
  • You have a lowered or low income
  • You have an Adjustable Rate Mortgage (ARM)
  • You are late on payments
  • You are facing financial troubles
  • You have a high debt to income ratio 35-39% or higher
  • You are facing foreclosure

Act now and find out if you might be eligible
for a mortgage payment modification.

High Interest Rates

High interest rates, adjustable rate mortgages and other things that will cause the home owner to go deeper into debt or end up paying much more than the house is worth or perhaps never pay it off are great reasons to get a mortgage modification.

During the housing bubble lenders gave out mortgages hand over foot to people who couldn't afford a mortgage and in other cases sold houses to people who couldn't afford their houses at the moment and then tried to make it up later through interest and other things and banked on the idea that the home owner would do better later.

Upside Down Mortgage

If you happened to buy your house at the peak of a bubble or something has happened to your house that has caused the value of the home to go down significantly and you don't have insurance to cover the cause of the loss of value, you might qualify for a mortgage modification. If you aren't sure if you qualify, ask anyway. You've got nothing to lose.

Financial Problems

If your mortgage is fair, if you have a good interest rate and your home value is at or above the price you bought it for and you still can't afford to pay, you can still qualify for a mortgage modification. Mortgage modifications are not just about the homes or lenders or fair market value. The most important thing in a mortgage modification is the home owner. If the home owner can't afford the home, then they aren't going to pay. Whether the home has gained value or the interest rates are low, if you can't afford it, you need the cost lowered.

When it comes to the home owners there are 3 main options: sell the house and hope you get enough to pay off the house and make enough to get along for a while, go bankrupt and then you have no more options or modify the mortgage (assuming you have already tried to increase your income). Once you modify the mortgage you still have the other two options and you have a lower monthly payment. Mortgage modifications aught to be the first step because it leaves all your options intact.

Continued: How much can I save on my mortgage payments?

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