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Buying a home is the American dream, but when financial hardship strikes and you can no longer afford the agreed monthly payment towards your existing mortgage, a loan modification can help you keep a roof over your head.
The truth is that obtaining a loan modification in Florida isn’t always easy, which is why you’ll need a trusted third party to help you through the process.
Because we understand how costly it can be to enlist the services of a Florida loan modification attorney, we offer mortgage loan modification services free of charge!
In this article, we’ll discuss everything you need to know about reducing your mortgage payments through loan modification. If you are a struggling homeowner or know someone who is, contact Florida Homeowner Solutions and let them help you save your home, credit, and sanity.
What Is Loan Modification?
A loan modification is a revision of the mortgage agreement that you originally made with a mortgage lender when you are behind on your mortgage.
Unlike mortgage refinance, loan modifications do not pay off your existing mortgage and replace it with a new one. It modifies the terms of your current mortgage agreement instead.
It’s also worth noting that these modification programs can hurt your credit score. If your monthly mortgage payments are up to date, it’s a good idea to consider your alternatives and apply for a mortgage refinance instead.
Because the terms must be approved by your present lender, you can only request a loan modification by approaching the company.
When you sign a loan modification agreement, you may receive a lower interest rate on your loan, which is a significant benefit of having your loan agreement modified.
What Modifications May Apply?
The following changes often apply when you apply for adjustments to monthly payments:
Changes to the Structure of the Loan
One of the most notable modifications is a change in the loan structure. You might be able to change your loan from an adjustable rate to a fixed-rate loan. This may be advantageous when you receive a fixed income and require a more consistent mortgage repayment.
Interest Rate Reduction
You may be able to alter your loan and earn a lower rate if interest rates have dropped since you applied for the mortgage loan. This means that your monthly mortgage payment amount will be lower.
Modification of the Terms of the Agreement
Additionally, you may be able to alter your loan agreement and prolong the loan term if you’re having problems making your monthly mortgage payments, which offers you more time to repay your debt while also decreasing the monthly mortgage payment amount.
Principal Forbearance
Some of your principal balance could be held aside by your mortgage lender to be repaid later. This can help you save money on your mortgage payments or make them more affordable. These changes, however, are uncommon.
You can typically only seek a principal forbearance if you have exhausted all other options to avoid foreclosure. To be eligible for a principal forbearance, you must typically be committed to a repayment plan.
This plan lets the lender assess whether you will be able to keep up with the new repayments. After completing the trial terms for the repayment plan, your lender may offer to reduce some of your principal.
A Few Things to Bear in Mind When Applying for a Mortgage Loan Modification
Lenders are under no obligation to approve your request for a loan modification. As a result, obtaining a modification is typically more complex than refinancing. You’ll have to provide proof of financial difficulty.
Moreover, when it comes to who is eligible for an alteration of their mortgage terms and what types of modifications are allowed, each lender has its own set of rules.
There may also be a better option to prevent foreclosure and if you choose a loan modification, you can still refinance the loan later.
Florida Homeowners Solutions Can Help!
If you have missed mortgage payments, settlement companies like Florida Homeowners Solutions can assist you in obtaining a loan modification. We do this by negotiating with your lender for you.
At Florida Homeowners Solutions, we have been negotiating with lenders for over 20 years, so if a mortgage modification is the only way for you to keep a roof over your head, we will support you every step of the way!
Unlike other settlement companies that often charge you hundreds of dollars for their services, we provide our loan modification services free of charge!
How Does the Loan Modification Process Work?
If you’ve never applied for a loan modification before, you probably feel overwhelmed. To help you know what to expect, we’ve included a summary of the loan modification process below.
Gather the Relevant Paperwork
To assess your current financial state, your lender will request to see your income and expenses. The financial institution will also want to know how your spending has changed since you obtained the mortgage and why you’re having trouble paying it back.
You will need to have proof before you can approach the lender, as a mortgage loan modification will not be granted without this evidence.
Contact Your Lender
Once you are ready, you will need to explain your situation and let the lender know why you are applying for a reduction on your monthly payments and why you have been missing payments.
When you describe your situation to your lender, he or she will explore possible solutions, including refinancing or a loan modification. Don’t try to keep information secret.
The more information you provide your lender with, the better they will be able to assist you in finding the best solution.
Apply for a Modification to Your Loan Modification Agreement
You will likely be asked to submit an application for a loan modification that the lender can accept or decline. If your application has been approved, you will begin paying your mortgage according to the new terms. That can be handled by calling 1 (800) 300-4663.
How to Qualify for a Loan Modification If You Are Behind on Your Mortgage Payments
A borrower must have missed a minimum of three monthly loan repayments and be in arrears to be eligible for a loan modification.
Moreover, a homeowner who has had financial difficulties and is on the verge of default may also qualify for a loan modification. However, not everyone who has fallen behind on their payments can get a mortgage modification.
You should be ready to submit proof of income, bank statements, tax returns for the past two years, and other related financial documents to your existing lender, in addition to a written letter or statement detailing your state of hardship.
The Benefits of Choosing Florida Homeowners Solutions When You Cannot Afford Your Monthly Payment
The reality is that mortgage modifications aren’t easy to obtain. Lenders are under no obligation to change the terms of the original agreement. We have been helping Florida homeowners for 20 years by:
- Helping them explore other options to avoid foreclosure
- Explaining the consequences of mortgage modification
- Contacting lenders to describe their situation
- Knowing which documents they will need to submit and helping them draft or source them
- Helping them understand the terms of the loan agreement
- Offering our services free of charge because we understand how overwhelming it can be to face foreclosure
Our team of experts has two decades of experience with lenders in Florida, so you can improve your chances of being approved for a loan modification with our help!
Final Thoughts
When you feel like you’re drowning in financial debt, a mortgage modification may just be the lifeline you need to stay afloat and prevent foreclosure.
Although it might affect your credit rating, it is the best option for many homeowners who have found themselves underwater.
Because the loan modification application process can be confusing and the criteria for eligibility often differ from one lender to another, you’ll need the help of a reliable company to communicate with lenders on your behalf to increase your chances of success.
We will also help you explore other options and offer you our wealth of experience and expertise to help you get through this tough time.
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