Getting a loan modification and a lower mortgage interest rate used to require great credit and a source of verified income. However, with today’s topsy-turvy market, nothing is as it was in the past. Even people with good credit, a record of timely mortgage payments and a lower debt-income ratio sometimes do not qualify. In fact, in many of these types of cases, these homeowners only have the option to re-finance, thereby paying all of the extra fees and costs associated with doing so.

Moreover, homeowners behind on mortgage payments, and who are unable to catch up, have some different kinds of options. Most lenders are in the precarious position of trying to make concessions to assist homeowners having a hard time making their monthly payments so that they may stop foreclosure and keep their homes. These lenders need to find new, inventive ways get those loans in default status to become current again. The best way to do so is by resuming payments.

Homeowners having problems making their monthly mortgage payment should consider a loan modification. This option allows the homeowners to remain in their homes without having to refinance, which often brings about a slew of new costs and fees. Moreover, this is a preferable option for your lender, as it allows you to continue repayment of the loan. There are a number of lenders that are willing to work with homeowners that pursue loan modification.

To qualify for loan modification, you need show what kind of financial hardship is preventing you from making timely monthly mortgage payments. Every lender has different guidelines for what qualifies as a hardship, but lenders need to see an avoidable, sudden loss of income to grant a modification of your loan. You likely will have to submit something in writing to your lender detailing the circumstances of your hardship and how your situation is forecast to improve. If you can prove that a lower monthly payment over an extended period is more financially feasible to you, they are more likely to work with you on a loan modification agreement. However, keep in mind that you are extending the repayment term of your loan, meaning your home will not be paid off in the amount of time initially agreed upon in your original mortgage documents.