How Can I Modify A Mortgage?
By Andy Miofsky, Illinois Consumer Law Attorney on Jan 12, 2009 in Mortgage Issues
To request a home mortgage loan modification from your mortgage holder you should gather financial documents to support your income, prepare a monthly budget, determine the type and duration of loan you require and submit your request to your mortgage servicer.
- Start with your most recent monthly loan statement. There you will find the name of your servicer, the address, the loan number and your principal loan balance.
- Gather your last federal and state income tax returns and your most recent pay stubs and/or receipts for non-wage income. Include verification for all retirement and investment income.
- Calculate your monthly income and expenses and determine how much you can afford for a mortgage payment.
- Calculate how much your annual real estate tax and homeowner insurance will cost on a monthly basis.
- Determine how long of a loan you want.
- Research how much interest you believe is appropriate for your situation.
- Calculate your proposed monthly payment based on your loan balance, the length of loan and your interest rate. You can find financial calculators online at Bankrate.com.
Write a letter to your servicer, include copies of your last tax return, your income verification, your monthly expenses and specify the length of loan, the interest rate and the montly payment you require. Your servicer may request additional information. This process is a negotiation. Do not agree to pay for unnecessary fees. Demand an explanation of any charges you are asked to pay. Do not pay any money down for a loan modification until you reach a firm agreement and you have the terms in writing.
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