In the past few years, many families have turned to home loan modifications to help save their home from being repossessed. If you’re having difficulty paying your mortgage, modifications may help you avoid the painful foreclosure process. However, make sure you ask yourself the following questions before you start the modification process:
1. Have you exhausted your other options? Home loan modifications shouldn’t be taken lightly. Although you may be able to get lender forgiveness for missed payments or lower what you owe each month temporarily, there are consequences – from higher payments down the road to an increased interest rate. You may want to look at other choices, from getting a second job to moving to a smaller home, before getting loan modifications.
2. Have you talked to your lender? Before you proceed with modifications, make sure you’re in touch with your lender. The earlier you talk to them and let them know about your current situation, the more likely they will be to consider alternative arrangements. If you wait until you’ve already missed several payments, they might not be as willing to work with you on loan modifications and might choose to foreclose on your home instead.
3. Can you afford higher payments down the road? Home loan modifications are a great option if you’re simply having trouble paying your mortgage right now, whether because of medical bills or some other expense. However, if you’re unemployed and can’t find a job, home loan modifications may only be a stopgap measure – so make sure you’re able to afford higher payments in the years to come.
4. Have you looked at a variety of loan modification companies? Finding a home loan modification company these days is simple – the market is flooded with people who will work with your lender on your behalf. For this reason, be sure to research the full range of available companies before making a decision. Make sure your company of choice is trustworthy.
In some situations, modifications can stop foreclosure, but in others, they only postpone it. If you can’t pay your mortgage, you might want to proceed with loan modifications – but make sure you’re cautious and you take the time to make sure it’s the best choice for you.
