If you need a loan modification in order to save your families home from foreclosure, there is information you will need from your borrower to maximize your chances of your application being approved. Your borrower will not hide this information from you if asked, but often borrowers will not volunteer this information. So be sure to inform yourself about the whole process before you contact your lender, and know what to ask. Here are three vital questions you must ask your lender for the best chance of loan modification approval.
Question # 1: What are your specific approval requirements?
Although there are many similarities, each lender has slightly different approval guidelines. Know what they are before applying. You must not lie on your loan modification application, but that does not mean that knowing what will lead to approval or rejection does no good. Some information may be optional, or could be presented in more than one way. You do not want to present your information in the wrong light, so do not fly blind.
Question # 2: What is your threshold for debt ratio?
Every lender has a formula to determine whether or not you can afford your mortgage payment. This depends on your debt ratio: your gross monthly income divided by your monthly mortgage payment times 100. This must be above a threshold determined by your lender for your mortgage payment to be considered affordable. The important thing to remember is that your application must show that your mortgage payment is NOT affordable now, but WILL BE once the loan modification is approved. And if you know your lenders threshold, you can be sure your application will qualify on debt ratio before submitting it.
Question # 3: Is my loan modification application correct and complete?
Your lender will base their decision primarily on the information and documentation you provide them. Are you presenting that information correctly? Have you included all of the necessary supporting documentation? Do not deal with a rejection or delay because of something easily preventable. Before you mail your loan modification application, ASK them.
Having foreclosure looming over your head is confusing and frightening. Get the information you need, learn about the whole loan modification process step-by-step, and you'll feel more secure and in control of the whole situation. The more you know about the process the better your chances of success. Thousands of borrowers have saved their families home by using a loan modification to bring their mortgage payment down to something that they can afford. Educate yourself on the process and communicate with your lender and you can do it too.