Home loan modifications are very serious financial commitments, in the same way as a mortgage is. According to the Golden State Financial Group it is, in fact, more serious than a mortgage application, because a loan modification is about asking whether a lender can change the terms in your favor. It is very common, therefore, that people are rejected in their application, since they don’t incentivize their lender enough.
Golden State Financial Group on Rejections
Although it is called a loan “modification”, you really ask a lender for a brand new loan. Hence, your lender must look at whether or not you will be able to pay your loan back. This means your finances are scrutinized from top to bottom once again. If they then decide that you can indeed afford the new terms, they will accept you.
However, if you are rejected, do not take it personal: to the lender, you are just business, nothing else. It is better, therefore, to look at things from that standpoint before you even apply. If you know what your limitations truly are, you have a better chance of putting in the correct application as well.
Start by thinking about what your current situation is like. Consider your family’s needs and be realistic about whether or not you can actually afford the mortgage. All loans carry interest, which means you always pay back more than what you borrowed. Your loan effectively grows. This is why you shouldn’t try to fudge your situation because you will end up in an unaffordable situation – and lenders will find out as well.
Remember that, for the lender, this is simple business. Hence, even if you request a modification because you want to make home improvements that will increase the value of your home, they aren’t overly interested. They want to know what the situation is like now, not what it possibly will be like in the future
You could try to complete your first application for the loan modification yourself. Asking a professional to do it for you is generally quite a costly affair. If you do it yourself, you have a chance of being accepted straight away and not having to pay those costs. If you are rejected, you will be given a reason, which means it is easier to supply the necessary information if you try again. If you do try again, then it is recommended to speak to a professional and bring all the information from your first application.
Companies like Golden State Financial Group have very high standards. They are, in a sense, like the lender in as such that they will expect you to be completely forthright with them. The more you do that, the easier it becomes for them to help you, the less it will cost you, and the more likely it is that you are accepted. Moreover, they may be able to significantly drop your interest rates, which, if nothing else, will take a financial burden off your hands.