The housing market of the past dictated that in order to qualify for a low mortgage loan interest rate, borrowers had to have a verifiable source of income and an above average credit score. This rewarded homeowners who strived to maintain good credit and a low debt-income ratio.

However, everything is topsy-turvy in today’s real estate market. In addition to those homeowners with excellent credit and who are able to afford to pay their mortgage as it is, another group of homeowners is finding they too can take advantage of lower, more affordable interest rates.

Homeowners who have fallen behind on their mortgages and who are in a loan situation they cannot afford, are benefiting from a number of assistance measures put in place to help them catch up. This is significant, because, let’s face it; many homeowners have to go through the extensive process of refinancing, and incurring the numerous fees that go along with such a process to get a lower interest rate.

Because of the state of the current economy, lenders have been placed in the precarious position of giving the financial breaks and rewards – that normally would go to those borrowers who pay on time -- to those that have fallen behind. They need those loans that are in default to become current once again, and lowering the interest rate lowers the monthly payment and increases the chances that the homeowner again will be able to pay.

If you are one of those struggling homeowners, or even one in good standing just looking for a better rate, you might consider looking into a mortgage loan modification program. This is a contract between you and your lender that allows you to modify some of the conditions and terms of your current loan to your benefit. Lenders are usually willing to work closely with the homeowner to put a plan in place to help them catch up on their payments and a loan modification is one option.

The process is fairly simple compared to refinancing, but there are still some steps you must take. You should first find out if you qualify. Banks and lenders usually need to see some proof of hardship, such as a loss of income or a sharp and unavoidable increase in outgoing expenses every month. You will need to detail the particulars of your hardship in written form for your lender. This letter is of the utmost importance since it is the sole documentation in which your lender will use to render its decision.