Buying A Home With Bad Credit – Mortgage Modification to the Rescue
By Adriana Barnes on September 24, 2010, 6:00 am
You might get into a situation when it becomes nearly impossible for you to pay the monthly installment of your mortgage loan. Such a situation like having a bad credit mortgage may arise because of different circumstances, for example, your salary decreases due to the ensuing recession, or your running expenses and bills etc.
At such times of difficulty you can get rescued by modifying your mortgage loan. Mortgage loan modification or refinancing is the act of getting exemption or reaching some sort of settlement regarding penalties and other terms and conditions on the original mortgage loan obtained from the lending bank. Changing the terms and conditions of the loan will change the factors such as reduce the interest rate, allow a longer term to repay the whole loan, or to decrease the quantum of monthly payments so as to make them affordable for you.
You just need to be fair and transparent in handing over your documents and other related information to the lending bank so as to get the best deal from it. Once you are determined that this is what you are going to do, then you have to write a loan modification request to the lending bank which would entail the precise information for example that you are unable to afford the monthly payments under the current terms and conditions and the reason for that.
Beware that the letter should be to the point and contain nothing but the facts. Before agreeing on the new refinanced loan which is in fact a second loan against the same asset, remember to properly peruse the rate, monthly payments and other terms and conditions. If you have a good credit score, your bad credit mortgage refinancing application would process faster. On the other hand, if due to a bad credit rating the refinance application gets rejected, you need to apply for a hardship loan modification, which besides lowering the monthly payments, also helps in improving your credit rating.
