Many lenders have their own loan modification programs, with their own formulas and requirements. Moreover, if the homeowner is delinquent in making payments under the trial modification program, it is almost certain that the application for a permanent modification will be denied. Please be aware that if your application for a permanent modification is denied, the lender may demand that you pay the difference between your original monthly payments and the trial program payments. Some lenders allow homeowners to participate in a trial modification program while their application for a permanent modification is being considered. Please be aware that in some cases, the length of the loan or the principal balance may be increased in return for a lower interest rate and monthly payment. If not, then your application will be denied, and you will still be bound by the terms of the original loan. If your numbers meet the numerical formula used by the lender, then your application will be approved and your loan terms will be changed. You apply for a modification in much the same way that you apply for a loan, by providing personal and financial information, tax returns, proof of employment, etc. If you obtain a permanent loan modification, then your monthly payment may be reduced to a more affordable amount. A loan modification is a written agreement between you and the holder of your mortgage to change the original terms of your mortgage (such as the length of the loan, principal balance, or interest rate).
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