Monday, January 17, 2011
One Way to Prevent Foreclosure
As our economical times are not improving, many people are looking at the possibility of losing their home to foreclosure. There are several things the borrower can do to possibly prevent foreclosure of their home. One of the things they can do is to check out Loan Modifications. A loan modification is any change made to the original mortgage. It could be as simple as a change of interest rates or go from a floating to an adjustable or fixed mortgage. Loan modifications purpose is to lower the mortgage monthly cost for the borrower. The lenders are willing to help the borrower out in these situations because they will lose more money if they foreclose on the home. While they have to endure the cost of trying to resale the home and not recouping the cost of the original loan.
If you choose to go with a loan modification through a lawyer, a loan modification firm or the lender directly, it is imperative that you keep good records. Take notes of the names and phone numbers with extensions of everyone you speak with during this process. Outline your current financial situation and outline the outcome you would expect with the loan modification. This will show the lender your intent to meet your financial obligation. In your outline you will need to list all of your monthly expenses. Including fuel cost, groceries, monthly bills, debt payments and health and car insurance. Balance this against your monthly income. You will be proposing that with the lenders help, you will be able to meet the loan modifications expenses and your monthly financial obligations.
By getting a loan modification you are going to keep a good credit rating and continue to have a mortgage which is a tax benefit vs. renting. As our home is an important safe place for us all, losing our home is devastating and leaves us feeling unstable. Loan modifications give us a chance to remain in our home at a reasonable cost.