How to Get a Mortgage Home Modification Approved
- 1). Find out if you qualify for a mortgage home modification. The mortgage home modification must be for an owner-occupied property. The homeowner must have had a situation that resulted in a loss of earnings, or the payments have become too high because of an adjustable interest rate increase. Medical costs or some type of hardship may also make a homeowner eligible for a mortgage home modification. The balance on the first loan must not exceed the Fannnie Mae or Freddie Mac limit of $729,750.
- 2). Understand how the numbers work. The lender will adjust payments to 31% of the homeowners' monthly gross income and will adjust the interest rate down in increments as low as 2% until the borrowers qualify. Keep in mind that your income may qualify you at a higher rate than 2%. If a homeowner earns too much money or too little money, he or she will most likely not qualify for a mortgage home modification.
- 3). Be ready to produce a lot of paperwork for a home to get a home mortgage modification approved. Lenders usually require recent pay-stubs, 1099s if applicable, a recent property tax bill, the declaration page from the homeowner's insurance policy, IRS form 4506T (request for previous years tax returns) and a letter of explanation. If you're self-employed, be prepared to submit six months bank statements.
- 4). Contact an organization that helps people put together their paperwork to get a mortgage home modification approved. You can try to do a mortgage home modification directly with your lender; however, keep in mind that most people are not successful dealing directly with their lenders. There are many organizations that help people with mortgage home modifications without charging fees. Check the links below in the resource section for organizations that help homeowners get a mortgage home modification approved. NACA (Neighborhood Assistance Corporation of America) is one of the most successful.
- 5). Keep contacting your lender or the organization that is helping you with a mortgage home modification. This will be very time consuming and frustrating. Sooner or later you will find a person who is capable and responds to you. Be diligent about following up and turning in paperwork. Most likely, you will be asked to submit the same paperwork over and over again. Don't let the plethora of paperwork stop you from getting a home mortgage modification approved.
- 6). If you're in foreclosure or may be going into foreclosure, keep in mind that your lender can stop the foreclosure process while you try to get a mortgage home modification approved. You will probably be put into a forbearance plan with reduced mortgage payments until the paperwork is sorted out and a decision is made.
- 7). Be resilient and persistent. The government is putting pressure on lender to approve mortgage home modifications for those who qualify.
