If you are having trouble making your mortgage payments, as nearly American does at some time or other, and it doesn’t look like things will be getting any better any time soon, you might qualify for a loan modification. The idea of the American loan modification is being offered up by Fannie Mae, Freddie Mac and HUD to offer to restructure home loans for people who are struggling to make their home loan payments.
It sounds great, really. Change the terms of you loan without refinancing and be able to have payments you can truly afford. If you’re facing foreclosure, you may really want to give loan modification a good, long look. You should, however, be very, very careful when considering an American loan modification, as they could have loopholes that could be detrimental to your homeownership in the long run.
The American home loan modification is set up to primarily provide help for people who require help with their adjustable rate mortgage and owe more on their home than it is worth. This can be good news for people who have tried to refinance their home loan and can’t because they are upside down on their homes. The idea is to offer Americans who are having problems making their new, higher mortgage payments an alternative to struggling to refinance a loan they won’t be able to. Instead, when they have exhausted all other options, they can now get a home loan modification on their current mortgage.
Home loan modifications can help people to lock their current home loans into an affordable interest rate, thus offering a chance for homeowners to be able to avoid foreclosure and keep their homes at a price they can afford.
The problem that critics see in American loan modifications, is that many companies who claim to be able to perform home loan modifications are turning even this into more of a scam than a means of help for desperate American families. Before you consider a loan modification, it is so important that you read over every piece of paper there is and do not ever sign any contract until you have read and understand every piece of information on your home loan modification.
It is also very important to remember that an American home loan modification should only be used as a last resort. There are other ways that you can avoid a foreclosure on your home. Many lenders at this time are willing to work with you as long as you are trying to make your payments, or some of your payments, you may be eligible for programs that different lenders have set up for people who are struggling to make their mortgage payments. Remember that lenders have more empty homes on their hands than they know what to do with and they, too need money. Make sure to talk to your lender frequently if you are struggling to get caught up on your payments. Your lender may be able to also save your credit report and might be able to assist you in refinancing your mortgage at another time.
