Perhaps you are upside down in your South Plainfield home mortgage, if so, you may qualify for a loan modification that will reduce your monthly payments. Even if you have an adjustable rate mortgage, you may still get approval to modify your loan.
Most lenders would rather work out a loan modification instead of starting the foreclosure process. This is because there is considerable expense involved in foreclosing on a South Plainfield, New Jersey home.
What types of loan modifications are available to you? Most lenders have many programs that will help you avoid foreclosure, such as:
• Forbearance. Your current loan payment is suspended for a pre-determined amount of time to allow you to catch up on past due amounts.
• Forgiveness. Sometimes a lender will forgive or cancel part or all of the past due amount. You can then start making your regularly scheduled payments as agreed. When the lender writes off part of your mortgage debt, it may have a negative impact on your credit score.
• Refinancing. You may have the option to refinance your mortgage loan, including the past due and late fees, into the new principal of the loan. This will help you avoid more damage to your credit score. Depending on the equity in your home, you may receive money back when the loan closes.
Loan modification programs may help save your New Jersey home from foreclosure and protect your credit rating. One program, HOPE for Homeowner’s, doesn’t have credit score requirement. It does mandate that:
• The home is the primary place of residence and the homeowner can’t own any other property.
• There was no fraud in the loan documentation and the homeowner can’t have been convicted of fraud in the past ten years.
• The mortgage payments must exceed 31 percent of homeowner's gross income. There must be documentation that the homeowner can’t afford to pay the mortgage any longer.
Cathy Chaudemanche, My main Blog
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