Negotiating with your lender for loan modification – Essential tips you should follow

Are you facing difficulty in making the loan payments? Have you fallen behind in making the mortgage payments? If yes, then you may go for mortgage loan modification. The process of altering the terms and conditions of the existing loan in order to make the loan payments within your means is known as mortgage modification. Thus, you may go to your mortgage lender and negotiate with him to modify your loan. Make sure you have the correct information and necessary paper works required before you contact your lender for negotiation. This way, you will be able to make the loan modification program a successful one.

4 Tips to negotiate a mortgage loan modification with your lender

Have a look at the 4 tips to negotiate a mortgage loan modification with your lender.

1. Get in touch with your lender from before hand – While negotiating with your lender for mortgage modification, you need to get in touch with him from before hand. You’ll find many home owners who approach the lender for mortgage modification after they get a “Notice of Default” on their mortgage. To be on the safe side, contact your mortgage lender once you realize that you’ll not be able to make your monthly mortgage payments or you had already missed out a payment. Thus, the earlier you may approach your lender for loan modification, the sooner you’ll be able to pay off your mortgage loan.

2. Know the market value of your property – While thinking to apply for loan modification, you need to know the market value of your property. You may take the help of a property evaluator to check the value of your property thoroughly. This includes physical inspection of your property through the public records. In addition, the professional evaluator will also assess the market trends in order to know the market value of your property.

3. Be particular about the hardship letter – The hardship letter is considered to be one of the most important documents for mortgage modification. Many homeowners apply for mortgage modification at the right time in order to avoid foreclosure, but they forget to file a hardship letter for loan modification application. A hardship letter informs the mortgage lender about your financial condition and why you want to opt for loan modification. Make sure you include all the details about your finances together with convincing your lender that you’ll not be able to make the monthly payments in future without loan modification.

4. Formulate a pay-off plan for your home loan – You need to formulate a pay-off plan for your home plan in the loan modification process. When the lender goes through the hardship letter, they may ask you as to how you’re planning to repay your loan. Submit the correct information in your hardship letter so that you can request the lender for a mortgage payment that you’ll be able to pay. Tell your lender about the next payment that you will have to pay. This shows that you really want to pay off your loan and that you’re facing financial hardship at present due to which you find it difficult to repay your home loan.

Apart from this, if you have an adjustable rate mortgage due to which you find it difficult to make your payments, you may also inform your lender that you want to change to fixed rate mortgage. Write down in the hardship letter about your present income and how you’re planning to repay your loan. Keep in mind that the more information you will provide correctly, the more likely there are chances that you will get approval for loan modification.