How to Get a Mortgage Modification

If you find yourself in a sticky position and are unable to make your mortgage payments, there may be a way to change your loan terms and keep your house through a mortgage modification. A mortgage modification is a renegotiation of the terms of your mortgage. The goal is to get you lower monthly payments. Generally speaking, any loan can be modified if both the borrower and lender agree to terms.

Step One: Organize Your Finances

Before you meet with your mortgage lender, be as prepared as you possibly can. Take the time to organize your finances.

• Make a record of income versus expenditures that will show you're incapable of maintaining the present payment schedule.
• Show how you've made budget cuts in an attempt to continue paying at the current rate.
• Have a plan worked out, a figure in mind that will allow you to make lower payments on time.
• If you're already behind on your payments, be ready to explain how you will be able to make future payments on time if they're lowered.
• Seek professional help in the form of a financial counselor, an accountant, or an attorney who specializes in finances. Their advice will be appreciated, and maybe even necessary, when it comes time to sign a renegotiated contract.

Step Two: Contact the Mortgage Holder

After you're organized and have some idea of what type of payments you'll be able to handle, get in touch with your mortgage lender. Let them know your financial situation has changed and you need to talk to them about lowering your payments. Explain that you have every intention of making the payments, but you will undoubtedly fall behind if you can't modify your mortgage.

If you're already behind in your payments be prepared to show them how lowering your payments will help you meet your financial obligation to them. If you anticipate your financial setback is short term and will improve soon ask if the payments can be skipped for a few months until you get back on your feet.

Step Three: Work out a Deal

If you enter into negotiations with your mortgage holder in good faith, and are well prepared for the discussion, they will realize you're serious about meeting your financial obligations and more than likely be willing to work out a deal. It would be to their advantage to do so, because neither party really wants to go through foreclosure. Remember, lowering your monthly payments with a mortgage modification will mean making payments for a longer period of time. The bright side is you'll be able to keep your home, and your credit rating will remain intact.

Guest post from Bailey Harris. Bailey writes for the Home Insurance Blog.

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