If you want to successfully obtain a modification of your mortgage from your lender, it is imperative that you get all your ducks in a row before making your request. In summary you need to prepare a monthly budget, determine the duration and type of loan that you will need, get all the financial documents that you will need in order to support your income, and finally send your request on to your lender.
The steps are as follows:
- Find your last monthly loan statement. Write down the name of your servicer, the address, the loan number and your principal loan balance.
- Get your last federal and state income tax returns and your most recent pay stubs and/or receipts for your business. Include documentation for all retirement and investment income.
- Make lists of both your monthly net income and your monthly expenses so that you can figure out how much you really can afford for a mortgage payment.
- Divide your annual real estate tax and homeowner insurance by twelve so that your can will cost on a monthly basis.
- Determine how long of a loan you want.
- Research how much interest you believe is appropriate for your situation.
- Calculate your proposed monthly payment based on your loan balance, the length of loan and your interest rate.
You can find financial calculators online at Bankrate.com. Once you have done you’re your modification homework, write a letter to your servicer, including copies of your last tax return, your income verification, a list of your monthly expenses. Make sure to specify the length of loan, the interest rate and the monthly payment you require. Be prepared for your servicer to request additional information. Remember that the process is a negotiation. Demand an explanation of any charges you are asked to pay. Do not pay any money down for a loan modification until you both reach a firm agreement and you have the terms in writing.