Facts You Need to Know about Loan Modification

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With the high rate of unemployment and even higher underemployment many homeowners are seeking ways they can reduce their mortgage payments in order to avoid foreclosure or having to enter into a short sale. The decision is not always easy, but if you make it a point to learn about loan modification, you will be in a better position to understand what is involved with loan modification and how it can help you. Your individual circumstances bear the most weight when it comes to qualifying for loan modification.

Always avoid making any decision about your financial future unless you conduct some research on your own first. Make sure you read any information you can find about loan modification before you make a final decision. You may wish to make a list of questions you need answered during the course of your research. Some of the things you may wish to know include the following:

• How can loan modification help in my circumstances?
• How do I know if loan modification is the right decision for me?
• Do I have enough income to support a new mortgage payment even though it will be lower than I am paying now?
• If your spouse is not currently on the deed to your house but contributes to the family income, you may want to question whether you should add him or her as an additional income source.
• Do I need a long-term or short-term plan?
• Were there any preventable contributory factors that caused my current financial problems?
• What do I need to do to avoid running into the same problems again after loan modification and payment restructuring?

There may be other questions that may come to your mind when you are researching loan modification. It is essential to evaluate your own circumstances in order to assess the best course of action for you and determine how much you can afford to put into a mortgage payment at the present time. When you're considering what you can afford to pay with a loan modification you want to keep in mind you will not need to pay more than 31 percent of your gross monthly income for a mortgage payment, but you also need to ascertain your current financial circumstances actually support this payment amount. Even if you are currently paying more than 31 percent of your income for your mortgage payment, it's important to make sure you don't defeat the purpose of using loan modification to lower your mortgage payments.

Once you know what questions you need answered you need to find out where you can find out about loan modification. While the easiest and most obvious place to find the information is on the Internet, you can also locate information in newspapers and by talking to local lenders who participate in the various loan modification programs. While there are also private loan modification programs, the most common one is the government sponsored loan modification program; information is available on various government websites include Department of Housing and Urban Development office (HUD) that sponsors the current loan modification program that the Obama administration approved. Do not make any decisions until you find out everything possible about loan modification and determine whether you feel it is the right decision for you. Do not wait until your home is ready to go into foreclosure before you begin researching loan modification.