3 Eligibility Criteria and 3 Documents Required for Loan Modification
If you are facing financial difficulties making your mortgage payments, get help from loan modification program. Loan modification is an alternative to prevent foreclosure. Thus, it helps you to remain in your home by saving you from foreclosure. With the help of loan modification you will be able to change the mortgage loan terms with your lender and make your payments more affordable. Loan modification helps you not only to lower your interest rate, change the time period of your payments, lower your monthly payments and also helps you to roll your past dues into the loan.
Eligibility requirement
In order to get loan modification help you need to fulfill certain criteria. Here are some of the criteria you need to fulfill.
- Missed mortgage payments – If you have missed one or two mortgage payments and you are still unable to make your payments, you are eligible to get a loan modification program. When you are at risk of impending default or if you are facing reduction in your income, loan modification can help you out.
- You must be in financial hardship – In order to secure an approval for loan modification program, you must be in some financial hardship. You must have your documents ready to prove your income and your expenses and you also need to provide evidence of your financial hardship in order to get approval of your loan modification program. Even if you have filed a bankruptcy, you can qualify for your loan modification program.
- Get your credit report – You need to get your credit report and thus, you must immediately order your credit report ready. Fannie Mae or Freddie Mac will ask for your credit report when you go for loan modification program.
Documents you need to have
Here are the lists of documents you need to have in order to get approval for your loan modification program.
- IRS form – You need to have the IRS Form 4506-T or 4506-EZ. This form helps the mortgage servicer to have a look at your income tax return. This form needs to be signed.
- Request for modification form – You need to have your Modification and Affidavit form ready. This document has all your basic financial information and also contains the reason for your financial hardship.
- Proof of your income – You need to offer proof of your income and expenditure. Self-employed people have to provide proof of their profit and loss statement. You may get help from loan modification program even if you are unemployed; you need to provide a monetary determination letter.
If you get some other types of earned income such as tips, overtime, commissions, housing allowances and bonuses, you have to submit that too along with reliable third-party documentation. Thus, prepare your documents immediately before you get started with your process of loan modification program.
About the author
Samantha Taylor is the Community Mentor of MortgageFit and has been contributing her suggestions to the Community since 2005. Not just that, she has also made notable contributions through the various articles written on different subjects related to the mortgage industry. Few of her popular articles would include names like ‘Mortgage that you can afford’, ‘Mobile Home Loan with Bad Credit’, and How much mortgage can I borrow?’
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