April 5, 2023
Can I Get a Loan Modification?
This is a question I get asked frequently. If you have a property in South Carolina and are struggling to keep up with mortgage payments and are seeking ways to avoid foreclosure, a mortgage modification could offer the help you need to save your home.
What Is a Mortgage Modification?
A mortgage modification changes the original terms of your loan. There are several ways your mortgage could be modified, including:
- Increasing the loan by adding the past due payments
- Extending the loan term
- Lowering or raising the interest rate
- Recalculating the loan payment based on the new amount, interest rate, repayment term
Loan modifications are designed to give homeowners struggling to make their payments every month an opportunity to catch up on their loan and recover from their financial hardship.
When Should I Consider a Loan Modification?
You should consider a loan modification if you:
- Have a hardship – If you have experienced something unexpected in your life that has made it difficult to keep up with your payments like a job loss, disability, illness or death in the immediate family, a loan modification may help you stay in your home
- Have negative equity – if your home has negative equity, a traditional refinance is typically not available. A loan modification may help you with more affordable terms while you build equity.
- Have a sub-prime loan – if you have a loan with unfavorable terms, the lenders may consider a modification
- Have past due payments – if you are in pre-foreclosure, then you should request a loan modification. Lenders do not want ]to foreclose and may be willing to work with you. You will need to demonstrate how your hardship is temporary, and that you will be able to begin repaying the loan with the new terms.
Who Qualifies for a Loan Modification?
Not every South Carolina homeowner automatically qualifies for a loan modification and not all loans are eligible for modification. The company that owns your loan (the investor) must offer modifications and you must be able to prove that you meet the investor’s requirements for a possible modification. Typically, lenders make their decisions based on income and the ability of the property owner to make payments moving forward. Current pay stubs, bank accounts, and tax returns are looked at to determine if someone would make a good candidate.
You Deserve Support
You are always allowed to contact your mortgage lender directly and work on a possible modification yourself. You are not required to use an attorney to apply for a loan modification.
Mortgage Loan Modification can be a major benefit to families facing income loss. A loan modification application is a tedious, complicated, and time-consuming process and may be best with the help of a trusted attorney, especially if you are considering applying for a modification at the same time that your home is also in an active foreclosure case. With the guidance of a skilled attorney, you can get a better understanding of whether you’re likely to be approved for a loan modification and whether or not you meet the lender’s criteria.
If you have questions about loan modifications or would like to review your individual circumstances to see if you qualify for a loan modification, I would be happy to provide you with a free initial consultation.