Tips on How to Prepare for a Loan Modification

Tips on How to Prepare for a Loan Modification

tip-on-loan-modificationBefore you get started on the process of attempting to get your loan modified you must first understand that you will need a little patience. The typical time line for a loan modification is between 60 and 90 days.

The second thing you must understand is that you need to be very open in terms of your current financial and personal situation. Not disclosing information to your bank or third party negotiator will only lead to disappointment down the road for your loan modification.

Third, you must collect a number of documents. You should have them ready before you start the process so that the process can be expedited. You will need: Last years taxes, your original loan documentation, recent pay stubs, and recent bank statements. The information you provide for a loan modification is very similar information you provided when you received your loan in the first place.

Forth, you will need to write a hardship letter detailing why the bank should provide you a loan modification. For more information on hardships letters go to: Tips on How to Write a Hardship Letter and Sample Hardship Letter.

Fifth, be clear on what you actually can pay when it comes to your loan modification. Understand what new terms for your loan you can live with. Getting your loan modified but not being able to afford the new terms of the modified loan does not help anyone.

Finally, decide if you want to go it alone on your loan midifcation and negotiate with your bank all by yourself or hire a professional negotiator or attorney who has done a significant number of loan modifications. The banks do not want to end up with your home if they can help it but they will have their own interest at heart rather than yours. If you do decide to go with a third party to help you make sure you check references and make sure that the operation is a legitimate one.

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