If you are behind on your mortgage and have been notified by your lender that they are going to begin the foreclosure process, you may wonder what options you have to stop this from happening. While filing for bankruptcy is one of the best ways to stop a foreclosure, you may want to try a different method first. Applying for a home modification loan can be a good method to use to stop a foreclosure, but your lender will have to approve it in order for the foreclosure proceedings to stop.
How do you qualify?
Before you even begin to think about this option, it's important to find out whether you qualify. If you meet the following two requirements, you may be eligible for a home modification plan:
- You purchased the house before January 1, 2009
- You owe less than $729,750 on your house
If you meet these two conditions, there is a good chance you will qualify; however, it will take more than that to get the modification to go through.
The two other main requirements needed for home modifications are proving you have enough income to pay the loan if modified, and proving that you were behind on your loan because you went through some type of financial hardship. If you believe that your situation meets these requirements, you should contact your lender to find out what you must do to start the loan modification process.
What are the benefits of this?
If your lender approves a home modification, you will receive several key benefits, including:
- It will stop the foreclosure – As soon as the modification is approved, the foreclosure proceedings will stop, and you will get to stay in your house.
- Your loan terms will change – Modifications are done as a way for homeowners to save their homes. Because of this, lenders will typically drop interest rates on the loans, and they will either reduce the principle balance or add in all past due amounts to the total amount of the loan. In any case, the procedure will make the mortgage current and easier for the homeowner to pay.
These are the top two benefits offered through home modification loans; however, not everyone qualifies for them. If your lender denies your request, the only method you may have to save your home is to file for bankruptcy. If you would like to learn more about how bankruptcy can help, contact a lawyer in your neighborhood like Jeffrey S Arnold Attorney At Law P.C. today.