Some May Avoid Foreclosure with Loan Modification
Oct 12th, 2009 @ 8:30 AM by Debbie Dragon
Thousands of people have recently been facilitated with the process of home loan modification during this recession. Recipients are able to repay their loan amount as they’re able, which protects them from ruining their credit and allows them to remain in their homes. Dealing with everyday living expenses and mortgage payments at the same time can become overwhelming and complicated. A majority of people are unaware of the details concerning the numerous qualifications for home loan modification. Don’t be discouraged to apply, even if you have bad credit, because there are many ways to get approval for a home loan modification. Following are a few myths about modification, and the facts that state the truth clearly.
- Loan modification is very expensive: This is the main reason why many families avoid the avenue of mortgage modification. Others believe their bad credit score creates a lower chance of being approved, so the money spent on a modification application fee would be a waste they can’t afford.
- There are consultation fees and hidden charges: Some companies do charge a consultation fee and others even sneak in hidden charges. However, most mortgage agencies offer free consultation and don’t charge any fees until the loan modification is approved and in process. Do research on various loan modification companies to find those that offer free consultation. This will tremendously assist with narrowing down your choices.
- Mortgage loan modification is necessary only with an impending foreclosure: The circumstances that necessitate a loan modification are understood by many individuals. Though many are mislead by this false assumption, during an impending foreclosure is not the only situation when a loan modification is helpful. Reducing the cost of monthly payments or the loan interest rate and principal interest, as well as extending the life of the loan are other common reasons for using mortgage loan modification. This can be extremely advantageous during a time when many unexpected expenses are added to your already out-of-control debt. By reducing your monthly mortgage payment, you then have extra funds to use toward paying off other debts. Of course, financial needs and reasons for using mortgage loan modification differ with each family or individual.
Debbie Dragon is a full time freelance writer and the co-owner of ReliableWriters.com.