Loan Modification Agreement: You're Probably More Eligible Than You Think

If you are a homeowner facing financial hardship and you are either having trouble or are unable to pay your monthly mortgage payment, you may be able to meet a loan modification agreement with your lender. In meeting a loan modification agreement with your lender, you are agreeing to pay smaller payments over an extended period of time in order to keep your home and budget your expenses.

There are loan modification firms and government programs that can help you read a loan modification agreement with your lender. Are you on the verge of foreclosure and can't see a light at the end of the proverbial financial tunnel? Then looking into working with your mortgage lender for a loan modification agreement may be a good option for you.

There are several variables a lender looks at when considering coming to a loan modification agreement with a homeowner:

• Whether or not the homeowner has filed for bankruptcy in the past.
• The household's total income.
• Whether or not the homeowner is out of work, or whether they have been laid off and are now working at a lower paying job.
• If the homeowner has been late on mortgage payments. (A yes does not necessarily qualify a homeowner for home loan modification.
• The homeowner's credit score. (The criteria for a loan modification agreement is much less strict than it is for something like refinancing, which requires a very good credit score.)
• The homeowner's past mortgage payment history, usually prior to the homeowner's financial hardship.

Each mortgage lender has different criteria for qualification for a home loan modification agreement. As a homeowner, you can calculate how much the maximum you would be able to pay and present it along with the loan modification application you submit to the lender. The lender will try to work towards an agreement with you or your loan modification assistance firm to reach a common goal of both parties. It is better for the lenders to get smaller monthly payments from you than nothing at all, and it is better for you to continue paying for your home than to be turned to the street.

You may be going through hard times, but that is no reason to give up and leave your home. Millions of Americans are reaching loan modification agreements with their lenders under the new Home Affordable Modification Program, which has opened the floodgates for families around the country to reach the means they need to stay in their homes. More families than ever are now eligible to receive home loan assistance due to the recession.

Go over the variables above and make notes of your status in each category. Just because one of them doesn't seem like it will fit into the criteria, you may be surprised. The government is pushing to help desperate families stay in their homes and you just may be one of them.

Emma Lanier, "Home Loan Modifications Agreements", Mortgage Lending Modifications