Understanding the Process of Do-It-Yourself Home Loan Modification

The typical American has a vision of a perfect dream home and works hard to make that dream a reality. In these recessionary times, that dream can start to turn into a nightmare. Perhaps you have lost your job. Perhaps your household spending power has declined. The paycheck does not go as far, prices go up faster than income. Even a medical emergency can land you in some very dire financial straits. The scariest part of any of these circumstances is facing the reality that you may not be able to meet the mortgage payments. Even homelessness becomes a possibility.Time for Home Loan ModificationThe loan modification program is promoted by the federal government to assist troubled homeowners. What can a home loan modification do for a beleaguered homeowner? A home loan modification can reduce your interest rate. A home loan modification can turn a variable rate mortgage into a fixed rate mortgage. A home loan modification can lower your monthly payments so that they fit reasonably well into your present down-sized-income budget.Getting StartedThe minute a homeowner starts to smell financial trouble that could influence the ability to meet the house payments, it is time to act. Your first step is to approach your mortgage holder or home loan lender and let them know what is happening. Understand that you will be talking to a less than sympathetic ear as you explain your problems. Mortgage holders do not really care if you are talking about a loan that is worth less than your house is appraised. They stand to recoup most, if not all, of the cost of the loan by reselling your house. Anyway, you need to carefully and thoroughly explain what is happening and why you do not feel that you will be able to meet your future payments.Next StepsYou need to ask your lender about qualifications for a home loan modification. From what you are told, start making a list. After learning what you can, the next step is to start formulating a hardship letter. It should basically reiterate what you have told your lender about the financial difficulties facing you. You must also realize that if your loan is worth less than the appraised value of your house, the lender is going to have a laundry list of reasons why home loan modification is out of the question.Paying for AssistanceFirms do exist solely for the purpose of conducting homeowners through the home loan modification process. These firms are comprised of experienced realtors and real estate attorneys. Be prepared to pay up to $6,000 for a process that you can probably handle on your own. If you are having trouble meeting your house payments; how are you going to pay that? But, that is your decision. Some are just too lazy or too afraid to undertake the venture by themselves, no matter the cost.Some Last Words on Home Loan ModificationIf your lender is unwilling to work with you, there are agencies to which they should be reported. Do not wait until your situation is hopeless before applying for a home loan modification. The sooner you get things rolling, the more money you will save and the more peace of mind you will have.