- 1). Review loan modification eligibility requirements. Debt obligations that exceed 55 percent of monthly gross income may qualify borrowers for home loan modification, reports CNNMoney. For example, if your monthly gross income is $4,000 and the monthly mortgage payment is $2,600, this is 65 percent of the gross income (which is past the 55-percent threshold).
- 2). Call the lender. Tell the lender that you want to apply for a loan modification. The company will need to verify that you meet the criteria. This will require submitting pay stubs and other supporting documentation.
- 3). Receive approval. After the lender has approved the request, the company will modify the loan. According to CNNMoney, loan modifications aim to lower mortgage payments to 31 percent or less of gross monthly income. For example, if gross monthly income is $4,000, mortgage payments won't exceed $1,240.
- 4). Sign the contract. The lender will provide a contract for loan modification. Review the contract carefully. A loan modification is good for a specific term, such as 24 months. Review the modification term to ensure the information is correct. If you find incorrect information, ask the lender to forward a revised document for signature. Loan modifications typically are signed at a bank branch.
Source...