Can You Modify Your Mortgage More Than Once?

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Loan modifications can lower your interest rate and increase the term of your loan. In some cases, lenders will lower the principal balance of your mortgage. If you are behind in your mortgage payments, you should contact your lender and ask if you qualify for a loan modification. If you previously received a loan modification and your financial position changed, you should reapply to see if you qualify for a new modification.

Requirements

  • There is no limit on the number of loan modifications you can receive. It is up to your lender and it will depend on your current situation. Lenders will ask for current income information. If you have experienced a salary reduction or a temporary layoff, you may be able to reduce your monthly payment to one that you can afford. Your lender will review all of your debts, to see if you will be able to afford a reduced payment. If you are unemployed, you will probably have to wait until you find a job to qualify for a loan modification. Salary reductions and layoffs are common in 2011. Most lenders are willing to modify your mortgage so that you can remain in your home.

Documentation

  • Your lender will look at your recent pay-stubs and bank statements and he will look at a copy of your credit report. He will also calculate your debt to income ratio to see if he can adjust your payments to fit within the lender's guidelines. If you have previously received a loan modification on your home, you will need to provide documentation showing why you can not meet the terms of the previous agreement. Be prepared to wait several months. You may find it necessary to provide duplicate copies of documentation you have already sent him.

Cover Letter

  • When you send in your paperwork, you should also include a detailed cover letter explaining your situation. This is not required, but it will definitely increase your chances of approval. It is not common, but it is possible to have your loan modified more than once. If your financial situation changes after your loan modification is approved you should contact your lender and explain what happened. If it is a result of a change in your employment, your lender may request that you get a letter from your employer to confirm the change.

Conclusion

  • Loan modifications are a relatively new phenomenon. They are responsible for preventing thousands of foreclosures. If you are having any difficulty paying your mortgage, you should contact your lender right away. Lenders do not want to foreclose, unless they have no alternative. The worst thing you can do is to ignore the problem and hope that it will go away.

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