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If you are facing mortgage debts or the threat of foreclosure you may have begun looking into your options. While short sales and refinancing offers may be on the table, consider all of your options. In many cases, lenders will downplay the likelihood of a loan modification or may hold strict qualification standards that deter you from pursuing this option. However, if you can afford to stay in your home with a reduced monthly payment you should always try to pursue a loan modification first.

Maximizing Success

While many people have been denied home loan modifications in the past, this doesn’t mean that successfully securing one is impossible for you. Every person’s financial situation is different and 100 percent unique to them, which means that there is no one-size-all option available. However, there are a few ways to improve your chances of successfully negotiating a mortgage modification with your lender.

First, it is very important that you contact your lender as early as possible when your finances become tight. Many times, lenders are more willing to negotiate with those who contact them before they miss a payment or become delinquent on their account. The reason is that lenders view missed payments as either irresponsible on your part or highlights your inability to financially maintain a payment plan. They tend to view those with missed payments as a risk when negotiating lower monthly payments.

Next, get educated by doing your research. Studies have shown that people who attend foreclosure counseling or mortgage debt relief seminars are more likely to successfully negotiate a loan modification with their lender. Why? Lenders view these actions as responsible and hold the impression that you are serious about resolving your debts. There are many third party companies, credit counseling agencies and even lender provided resources available for those looking to learn more about their foreclosure alternative options.

Last, be sure to know what you can afford. Many people enter modification negotiations with no idea about what they can realistically afford to pay each month. Your lender doesn’t want to have to do any additional work, so having an outlined plan of what you can afford to pay and how you can go about lowering your payment greatly improves your chances of securing a modification. Further, know the facts about successful modifications. A recent report from the Office of the Comptroller of the Currency shows that homeowners that obtained loan modifications through government programs, like the Home Affordable Modification Program (HAMP,) have more success than non-government sponsored modifications.

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