The government seems to be doing everything that they can in order to correct the real estate market. Even though Congress and the Fed are calling for the Obama Administration to cut back on unacceptable spending, they keep on trying to push through new legislation. The administration is moving forward with their "Making Home Affordable" loan modification program, that is intended to give monetary incentives to banks that go forward with short sales and deed-in-lieu transactions.
The good news is that the ten major lenders are involved in this program; the bad news is that three major commercial banks are not being given these incentives immediately. Either way, we are going to be seeing lenders more willing to work with borrowers in order to avoid foreclosures. In lieu of this, let's discuss the proper approach to renegotiating a mortgage.
First, you need to make sure that you are prepared on your end to provide any and all information requested by the bank. By approaching the bank with all of your affairs in order, you will be more prepared to move forward once negotiations have begun. Next, you need to have a good reason as to why you need to renegotiating the terms of your loan.
If you need a modification because you have ran up credit card debt and been irresponsible, you are out of luck. If you have experienced serious financial hardship, the bank will be more willing to at least hear out your case. If they do, they will need an extensive financial history outlining your monthly income and expenses over the last two years. Even though banks are more willing to work with you, you still need to show proof of timely payments, or an effort to maintain timely payments, even during your times of hardship.
If you are someone who took out an adjustable rate mortgage, and the adjustment of the interest rate moved your payment to a point that is no longer affordable, you may have the ability to refinance your loan into a fixed rate that can make your monthly payments more affordable.
The key to dealing with banks regarding refinancing and modifications is to not wait until the last minute. The best case scenario for a borrower looking to negotiate would be for them to be completely current on their payments while they are showing proof of financial burden to their lender.
If you wait until you start not being able to afford your monthly payment, lenders may see that you have been aware of financial hardship for some time before you attempted to renegotiating your loan, and may frown upon it. Not only that but, the time period for modifications may be a few months long, in which case you will either have to continue making payments at the unfavorable amount, or miss payments. Rarely do the modification department and foreclosure department interact in an appropriate manner, so it is in your best interest to make decisions promptly, in order to avoid a bad situation.
Anthony Flores is a real estate, mortgage, and investment consultant in Riverside Ca. For more information regarding Riverside homes for sale, please visit Southern California Home Source, your go to source for information regarding the Riverside real estate market.
Article Source: http://www.articlealley.com/http://www.articlealley.com/renegotiating-your-mortgage-2325015.htmlAuthor: tonyflorespsa1photo: morguefile
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