How To Modify Your Home Loan?

The real estate market got us in this mess to begin with, some were taken advantage of and some knew exactly what they were getting into but the reality remains that in order for all of us to win and help the country recover, we must find a way to keep people in their homes.

If your mortgage is readjusting and you are about to see a huge hike, what can you do?

I get asked this question about 10 times a day and yet the solution is simpler than you think. There are two facts that you must keep in mind so that you don’t waste your time.

1. Banks do not want to forfeit on your loans, they lose money!

2. You cannot just refinance elsewhere, as other banks don’t want bad debt.

Those two facts need to be understood by all before doing anything further on your part and understanding how to get results from your existing bank / lender.

The first step is a simple phone call to the right department, most banks have a loan modification department, call them before you default on your payments, the earlier the better.

The next step is to explain your ability to repay your loan but your need for some help on your rate or terms, in other words make the rep understand that you want to pay them back but they need to give a bit of  a break in order for you not to default.

If the representative is not cooperative, then please DO NOT give up, simply be kind and call back the next day until you get a favorable answer, remember no one wins if you lose your house so its their job to help you but it may be bad luck and you end up falling on the wrong representatives.

Here are some rules you must follow:

  • Compromise
  • Be calm and descriptive
  • Don’t ask for the impossible
  • Do not call ads on TV
  • Do not pay people outside your lender for modification
  • Do not attempt to get more cash out
  • This is not a conventional refinance
  • Do not go to other banks to refinance an upside down loan.