Are Mortgage Modifications a long shot?

There is no guarantee that your lender will agree to a loan modification, however many lending institutions are open to this idea. Your chances of success will depend on how prepared you are, and there are a number of things that you can do to help this process.

For starters, make a detailed spreadsheet containing your monthly budget. It is likely that the lender will ask for this information anyway, so being able to provide it immediately will prove your motivation and show that you are organized. It is necessary to prove an income before requesting a modification, and it is preferable if your income can cover your regular expenses, as well as the mortgage payments. Be sure to include every detail of your expenses, right down to gas.

A lending institution will look for some sort of hardship to necessitate the modification. If you have an illness, recently lost a job, or for some other reason can no longer afford the standard rate, they will want to know about it. Include specific dates and relevant details to give your story depth.

You are now ready to contact your mortgage company. Ask for the loan workout department to be directed to the right place, and they will tell you exactly what you need to know to move forward with the process. They will probably have a lot of forms for you to fill out, and many questions about your current financial situation. You may need to negotiate new terms, or you may be rejected, so be prepared for both possibilities.

Many people find benefit in negotiating new mortgage terms, but there are some risks involved, as well. If you have missed payments, for example, the lending institution may raise your monthly payments to get caught up. Renegotiating can also require legal fees, as well, as sometimes it is necessary to bring a lawyer into the negotiations.