If you’re having trouble making your mortgage payments or have stopped paying altogether, it may be time to consider attempting a loan modification.

What is a loan modification? A loan modification is an adjustment in the terms of your loan to allow you to stay in your home and resume making more affordable payments.  The adjustment may be a lower interest rate, a lower monthly payment, an extension of the term of the loan, or some combination of these.  In rare cases, homeowners may even receive a reduction in the principal balance of their loans.

To qualify for a loan modification, homeowners are usually required to submit information about their finances, employment, and monthly expenses.  Hamilton Law assists clients with all forms and paperwork to submit to lenders.  We make the process simple for you.

There are government programs that may provide you substantial relief.  For example, you may want to find out if you qualify for the government’s “Making Home Affordable” loan modification, also known as the “HAMP” program.  If you do, your loan payments may be reduced to 31% of your gross monthly income, and your interest rate may be reduced to 2% for the first five years under the program.  (After the fifth year, the interest rate increases one percentage point per year until it becomes set for the remaining life of the loan at the prime interest rate on the date your modification is finalized.)  For more information on the HAMP program, visit the government’s site at:  http://www.makinghomeaffordable.gov/

If you do not qualify for a government modification, you may still qualify for an internal or “in-house” modification with your lender.  Many internal modification programs provide similar relief to that of the HAMP program.  And, once your modification becomes permanent, your loan typically is returned to “current” status.

The “take home” message is this: If you’re concerned you can no longer afford your mortgage payments but want to remain in your home, you should explore your loan modification options.

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