If you fall behind with your mortgage payments to your lender, you may opt to apply for mortgage modification. This refers to a set of relaxations that lenders extend to borrowers based on the circumstances that affects the borrower to a point of not making payments. Be advised though that not all borrowers are entitled to mortgage modification as there are some rules that ought to be observed. These mortgage modification rules include:
Application should be done for your current primary residence – be advised that mortgage modification can only be granted for your primary place of dwelling. What this means is that you cannot qualify for mortgage modification if you apply for your business premise, summer home and such like places. It should be for your home, apartment etc where you reside permanently.
Personal identification – the first and most vital security measure is where you will be asked to present your identification documents i.e. social security number, birth certificate, driver’s license etc to help authenticate your personal identity
Reveal your financial status – most mortgage borrowers believe that they can change some things by covering up critical information regarding their financial status -- things they believe could make the situation look terrible. Know that the lender has access to your financial information under whatever circumstances so you should be very honest about all aspects to be able to get the assistance that you need.
The amount of burden on your gross income – rules for the newly revised mortgage modifications clearly indicate that at least 30% of your gross income has to be allocated for mortgage repayment. Note also that there could be additional surcharges that you ought to take into consideration.
Hardship Letter – this last mortgage modification requirement is arguably the most important part that will ensure you get a mortgage modification. This hardship letter, as the name would suggest, is a detailed document or letter addressed to your lender explaining (with proof) your current financial situation which is exhaustive to a point that you cannot service your mortgage faithfully thus proofing that a mortgage modification is important.
Lack of this hardship letter would as well mean absolute refusal to be granted mortgage modification. As such, the letter ought to be well written, compelling, and very comprehensive. Due to the seriousness that this hardship letter has, and because it is the determining letter as to whether or not your situation merits a mortgage modification, you might want to seek professional assistance when preparing this letter.
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Gary Allalouf- RA
Hawaii Realty International
Mortgage Articles
Hawaii Mortgage Basics
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