Get to Know Loan Modification

A loan modification is a payment scheme that helps those who are falling behind the payment of their mortgage. This is a way for the banks to avoid foreclosures and bankruptcy because in as much as you don’t want your property foreclosed or for you not to file bankruptcy, your banks and lenders don’t want to drive you in that direction as well because it will hurt them financially too. This is the reason why such payment schemes are made. It basically reworks your home loan in such a way that you can afford monthly payments. Loan modification may not have an adverse effect on your credit however if you missed out on mortgage loan payments, it will definitely leave a bad credit record. Finding ways to stop foreclosure is a must do so that you can maintain a good credit record. Get to know your loan modification plans and see if it fits your needs.

Be prepared with a budget

One of the things that your lender will check when you applied for loan modification is your budget. This is how the lender will determine if you are worthy for approval on loan modification. Many are being denied for loan modification because the budget does not justify why you need to apply for one. Your goal here is to make your lenders understand your financial situation as you are their best resource for finding out why all of this is happening.

Be Honest

You can never get a good result when lying. This will be the biggest mistake you will ever make because lenders don’t want to deal with liars.  Presenting your case factually is a must because banks and lenders are not stupid to not realize that you are lying. Remember they will verify everything in your application and if proven wrong, you are blowing away your chances to be able to keep your home. Submit a complete and honest application and once they see how sincere you are that you need help, then they will be more than willing to assist you all the way.

Be open and discuss matters with your lender

If you can’t make a payment, be open about it and inform your lender right away. That way they can help you to find ways to be able to make payments. Running away form obligations and hiding from them or not responding to their letters is not a good idea. Credit is based on trust and that is one thing that you don’t want to lose with your lender.

Get a stable job

It is easier for you to qualify for home loan modification if you have a stable and steady income. The lender should also feel that you are able to afford lower monthly payments. When you apply for a voluntary loan modification, the principal is not reduced; making it harder to be out of debt.  So finding ways to qualify for home loan modifications is a priority as it will help you gain financial freedom.

Consider a short sale

This is one of the other options you have if you can’t even keep with a lower payment after a loan modification. Here, you are required to sell a dwelling for an amount that is less than the loan balance in which the lender will agree to accept a reduced pay off and let go of the rest.

JCC Alliance Network has a brand new program called HEAVEN, (Home Equity Acceleration Velociity enrichment) to help people that are “upside down” and late on their mortgage.

Attend one of our free webinars.

Those who understand interest earn it and those who don’t, pay it. This is a fact. Unfortunately, not everybody is even interested in how compounding interest works. Some may seem aware but does not fully understand the damage it brings to their financial situation. Most would just worry about having a good working credit card and charge the purchases on it without even considering how much they will pay for the interest itself. This adds up to the mounting debt for many. To add, credit card companies even offer enticing offers to keep you spending so that they could earn more from the interest of the money that you owe.

Credit card companies earn not only from the monthly or yearly renewal fees but they earn big time with compounding interest. This is why many banks would extend credit cards to almost anyone who needs it. It’s an easy way to earn and get money. Let me try to explain how it works,  compound interest is the interest being added to the principal money that is owed  in such a way that the principal money that you owe is growing as well.  For example, you owe the credit card company $1000 dollars with 1% compounded interest monthly. By the end of the first month you will owe them $1010 dollars. However the succeeding month you will owe them $1020.1 because they will compute the interest rate at 1% from the money owed on the first month which is $1010 instead of the original amount owed that is $1000 dollars.

This may seem like a small amount of money for some, but over time, and the longer you pay your debt, the more money you will owe.  Not only is the interest growing but the principal money owed itself is growing, resulting to a mounting amount of debt. There will even come a time that you are paying double the amount of what you originally owed and to make matters worst, it becomes the principal amount of money owed. That’s why many financial experts would say to pay in cash instead to avoid accumulating credit card interest. Look at it this way; if you saved that money on a bank account instead of paying for interest, then you will earn more rather than losing it to the credit card company.

There are times that it is really unavoidable to use credit card instead of debit card and cash. If this is the case, the best thing you could do is understand which credit card has the highest interest rate and avoid using it. Use the credit cards with better deals and pay off the debt early to avoid it from getting bigger. There are many companies out there who can help you be on the way to financial recovery. Look for it and enjoy financial freedom.

A great way to get your interest rate down on the credit cards is simply call the banks (weekends are good, they’re not busy) and ask them to lower the interest rate. You never know. 

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