Home > Blogs > Utah > Who can qualify for a loan modification?

Brian Pitcher's Blog

By Brian Pitcher | Agent in Salt Lake City, UT

Who can qualify for a loan modification?

Loan Modification OptionsFor the record, the banks are not willing to modify your loan just because you ask. You need to qualify for it. It is a very similar process that you went through when purchasing the home, except it is a reversal process.  Instead of proving you have enough income flowing in to pay for the home, you now need to present a valid hardship. The banks do not consider inflation or your personal expenses going up as a true hardship, like the might be willing to do for a short sale. A hardship can only be considered if your income goes down.  Anyone who has experienced a reduction of their income could potentially qualify. Yet, there is a threshold on what the bank is willing do.

To determine your eligibility, answer these questions:

  • Do you currently reside in the home (you are not renting it out)?
  • Is your monthly mortgage payment more than 31% of your gross monthly income?
  • Are you employed?
  • Can you prove your current income?
  • Does your loan amount conform to the limitations of Fannie Mae (between $417,000 up to $729,750)?  Please keep in mind that these are ceilings, so if your loan is less than $417,000, you may still be eligible.

If you answered yes to most, if not all of these five questions, then you may have a chance of qualifying for a loan modification with at least one of the programs we will talk about in a couple of minutes.  Borrowers who are unable to make their monthly mortgage payments and who are struggling are at an imminent risk of default.

Another reason that a lender may consider loan modification is in the case of those ‘cozy loan’ gimmicks that will soon balloon.  Increased interest will reset the loan to an unaffordable amount.  Stay tuned to learn what to do.


For more information on the truth about Loan Modifications, Short Sales & Foreclosures please click here: http://savemyutahhome.com/

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer