In the wake of the recession and land meltdown, many lenders began offering mortgage modifications, which ease monthly payments so homeowners can remain in their homes and avoid foreclosure. But what are your options if you don’t want a loan modification or can’t qualify for one?
Alternatives to Mortgage Modifications
First, it is vital to know that not all homeowners are eligible for a loan modification. Typically, you want to be ready to demonstrate one among the following:
- That you suffered a financial hardship that has left you unable to pay your mortgage fully monthly
- That your home is under water, meaning the balance of your mortgage is more than the value of your home
- That you are locked into a high interest rate and are unable to refinance your mortgage
Even if you don’t qualify for one of the government-endorsed loan modification programs, you should still contact your lender to see if they offer any alternative mortgage modification programs.
If you don’t qualify for any loan modification programs, you may be relegated into a more traditional option:
- Remain in your home with your current mortgage
- Remain in your home and refinance your mortgage at a lower interest rate
- Sell your home, albeit it leads to a brief sale
- Allow the bank to foreclose on your home
Your mortgage modification attorney can assist you understand all of your legal options.