Who qualifies for a Loan Modification?

Most homeowners today are under the false impression that you have to be late on your mortgage to qualify for a loan modification (LM). That is incorrect. There are three main categories that fall under the most likely candidate for a loan modification.

1) The most common LM is done for homeowners who are currently late on their mortgage or have been late in the last 12 months. Some of these homeowners might also be in foreclosure but that is not a requirement to complete a loan modification. If this is you and you are currently working, you could be a strong candidate for a LM.

2) If you just had a baby or a family member/friend moved into your home, thus reducing your spending money, you can apply for a LM.

3) If you are employed but your employer reduced your salary or benefits (i.e. no overtime pay), then you also might be a prime candidate for a LM.

Keep in mind that anyone can apply for a loan modification. However, most lenders require you show hardship or some reason why they should work with you to modify your loan. Whether a homeowner wants me to call for them or they want to call themselves, I recommend that all homeowners communicate with their lender about modifying their loan. Its a great opportunity to see if you can qualify for a lower interest rate without having to refinance.