Loan Modification
Loan modifications have been used in a variety of ways to change the terms on a troubled mortgage. In some cases loan modification could prove to be advantageous and some cases not. Here are five warning sign you should look out for before getting a modification on your mortgage to avoid getting scammed.
The Guarantee
Be very aware of loan modification guarantees made by a company, saying that they can help you stop the foreclosure process and save your home. The fact is that no one knows if your current lender is willing to participate in the loan modification process. Every lender is different and a guarantee to modify a loan could simply be a tool to lore you to make a payment, when in fact nothing will be done to help you save your home.
Upfront Fees
As every media outlet is being bombarded with new loan modification deals, it easy to see a lot of offers that might seem legitimate, And in most cases sound like a great offer, in fact so good that the companies could ask for an upfront fee to get the process started or that the fees will help lock in the terms for the amazing offer. While the service may seem like it’s legit and will be to your advantage, in most cases it will not benefit you. Beware of upfront fees.
Sign Now To “This offer is for a limited time”
Make sure you take the time to read every document, never let anyone talk you into signing documents simply to take advantage of a great deal. The truth is that once you sign a document, you become committed to whatever that document says weather it benefits you or not.
Too Good To Be True
If the terms of the mortgage modification being offered sounds too good to be true, then in most cases it is. In most cases if a bank decides to modify a loan, they’ll lower the rate or loan amount so that your mortgage payments are at the maximum you can afford. Banks will be very hesitant and careful when looking at you debt to income ratio to determine the maximum amount of money you can pay for your mortgage while it’s still affordable to you.
Too Little Information
The necessary paperwork to process a loan modification is extensive. In most cases the bank doing the modification will need income, debt, savings, credit, and other information to get a better picture of your ability to pay back the loan. If a loan modification company tells you that it’s a fairly easy process, this is a good sign that you might be heading towards being scammed. I hope these 5 tips can help you when choosing to do a modification on your mortgage. Keep in mind that there are plenty of loan modification companies out there and you do not need to go along with the first company you see.
