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Can A Mortgage Rate Home Modification Stop Foreclosure?

By Stacy Williams

If you are experiencing financial difficulties and fear that you will not be able to make your mortgage payments, there are options you can pursue before your home goes into foreclosure. One option is a Mortgage rate home modification. If you have missed a payment, or fear that you may soon miss a payment, you should contact your lender immediately and inquire about this loan modification.

What is a Mortgage Rate Home Modification?

Mortgage rate home modification entails reducing your monthly note to an affordable level. In order to get your note to an affordable level, the lender may choose to reduce your interest rate, lengthen the term of your mortgage, and at times, defer the amount of principle owed. Whichever method is chosen, the end result is an affordable monthly note, thus avoiding foreclosure. A loan modification will be noted on your credit report, but it is much less damaging than a foreclosure.

Eligibility Requirements for a Modification

In order to be eligible for a mortgage rate home modification you must meet certain criteria. Your mortgage must have been taken out prior to January 2009, you must own and live in the home, and your mortgage payment must be greater than 31% of your gross income. The lender will evaluate your income, assets, and expenses and determine whether or not you can meet your current mortgage payments. If not, then they will likely proceed with a loan modification.

How to Apply for a Mortgage Rate Home Modification

Many lending institutions are participating in the federally funded Make Home Affordable Program, where they are required to evaluate a homeowner for a loan modification, prior to proceeding with any other action, including foreclosure. If you have missed a payment, or if you believe that you may soon miss a payment, contact your mortgage servicer immediately. You may also contact the Make Home Affordable Program where they will assign to you a counselor to evaluate your situation and make a recommendation. All of these services are free; do not pay anyone for advice on a mortgage rate home modification.

Related posts:

1. Can A Mortgage Rate Home Modification Help My Debt Problem?
2. What Is Mortgage Modification?
3. Will They Foreclose On My House If I Am Late On My Mortgage?
4. What Is Obama’s Mortgage Modification Plan?
5. How Do I Get A Loan Modification On My Mortgage?