If higher interest rates or lower income leave you struggling to make your monthly mortgage payments, you may be able to get a mortgage modification.
Do Your Research
First, use our mortgage modification calculator to see if you qualify.
Under the federal Making Home Affordable program guidelines, to qualify for a modification, you’ll have to have an unpaid mortgage balance of $729,750 or less for one unit properties, have a loan that was originated on or before Jan. 1, 2009, and have monthly mortgage payments that amount to more than 31% of your pre-tax monthly income.
Next, find out whether your loan servicer—the financial institution that collects your monthly mortgage payments—is participating in the Making Home Affordable program by calling the number on your mortgage statement or checking online. Keep in mind that your loan servicer may not actually be your lender.
Gather Your Files
Know your monthly gross income and make sure you can provide recent pay stubs, records of any other earnings and your most recent tax return. You’ll also need to provide account balances, minimum monthly payments due on all credit cards, student loans, car loans and other debts as well as information about your assets and your second mortgage, if you have one. And of course, you’ll have to explain why your mortgage is unaffordable, whether the rate on your adjustable-rate mortgage has gone up, you’ve lost your job, your income has been reduced or your expenses are higher for some other reason.
Make the Call
If your servicer is participating in the Making Home Affordable program, call them and ask to be considered for a Home Affordable Modification.
To go over your options based on your income and expenses, you may want to call contact a housing counselor approved by the U.S. Department of Housing and Urban Development at 888-995-HOPE (4673) for free assistance before calling your servicer.