Is it Worth Getting a Loan Modification?

Is it Worth Getting a Loan Modification?

A loan modification can help some homeowners who are temporarily in a financial hardship save their home from foreclosure.  Usually modifications are for three or five years and then they re-amortize and the interest rate goes back to the previous level. Hundreds of Scottsdale and Phoenix homeowners have found that loan modifications helped them keep their homes. Not only can they help you keep your home, but you can save tens of thousands of dollars in interest over this period of tme.

How to Qualify?

Sometimes, you will need to prove to your lender that you have an immediate financial hardship and can no longer make your monthly mortgage payments. In other cases, some lenders are willing to modify loans for people with no hardship, you have to ask go through their process and find out how your lender works.

If you have a variable rate mortgage, a mortgage modification makes more sense if you lower your interest rate at least 2%.  Also, you must show that you have sufficient income to make the new mortgage payments. The process of qualifying is much easier then when qualifying for a mortgage. Many lenders ask you to state your income, and usually they ask for the household income, in some cases they may ask for proof.

How Does a Loan Modification Work?

Understanding how a loan modification works let’s you make an informed decision if it is right for your financial situation. A modification modifies your current loan to lower the interest and increase the loan term. The arrearages may be added to the back end of the loan as well. Loan modifications are temporary solutions so they are not right for everyone.

Scam Artists

Watch out for any company that says they can help you with a loan modification and asks for a large upfront fee.  There are a lot of crooks who prey on distressed homeowners. They sound knowledgeable and do nothing but take your money. Always ask for references, and check the company out with the better business bureau. There are many good and legitimate company’s who do help, you just have to know who you are dealing with.

Do Mortgage Modifications Work

Statistics show that about 50% of loan modifications work if the modification is tailored to meet the borrowers’ specific financial needs. It is smart to retain a professional counsel to analyze your financial situation first. This way when you or your negotiator starts negotiating with your lender, you will have a financial plan in mind that you can negotiate for. You may also want to investigate refinances, short refinances and some other options as a reinstatement or forbearance

The Cameron Team

The Cameron Team has been helping many of our clients with finding the right solution to help them save their homes. Yes we sell homes, but we save them too.  If a loan modification is not right for you, we can help you with a short sale or by selling your home. 

We have had great success closing short sales in the Scottsdale and Phoenix area as well as the surrounding communities of McDowell Mountain Ranch, DC Ranch, Silverleaf, Grayhawk, Troon, Rio Verde, WindGate Ranch, Desert Highlands, Desert Ridge, Tatum Highlands, Tatum Ranch and the surrounding communities of phoenix. We have skilled negotiators that will negotiate with your bank to achieve the results you need and want.

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