If you are one of the thousands of homeowners wanting to modify home loans under refinancing programs, then you must be prepared for a long wait. Whether you are working with a federal program, such as the Hope for Homeowners program, or working on loan modification or refinance with your personal lender, you are heading into a bureaucratic mess. Most lenders are unfamiliar with every requirement for the Hope for Homeowners plan, and private lenders are being swamped with applications and are overworked and underpaid.
As you wait for your mortgage loan paperwork to be processed, you must learn to be patient and follow up with your lender about every single thing that is happening with your loan. You will probably have to wait months for your lender to make a decision to either lower your home loan amount or make modifications to reduce your monthly payments. Following are 3 key things you must know as you wait for final decisions about home loans:
You Must Keep Making Payments
You must keep making payments on your mortgage loan during this process, unless you are specifically told to stop doing so in writing by the lender. Failure to keep up the payments as you enter the loan modification or refinance process could cause your mortgage to go into default, which leads to foreclosure. If you cannot make your monthly payment, paying something is always better than paying nothing.
Stay In Communication with the Lender
Keep communicating with your lender through the refinance or loan modification process. Many times, the reason your loan is delayed is due to incomplete or missing paperwork. Check in frequently to make sure that your lender has everything he needs to make a final decision. If your situation changes, be sure to stay in touch and let your lender know what’s happening. Keep a written log of every time you speak with the lender and note whom you spoke to, when, and what the final outcome of the conversation was.
Stay In Your Home
Stay in your home throughout the refinance or loan modification process; do not abandon the property. You cannot qualify for certain types of assistance if you move out of your home and you are falling behind on payments. Do not rent it out either, as renting changes your home from a “primary residence” to an “investment property,” and this will significantly impact your ability to refinance your home loan. Staying in your home means you are maintaining the property for which you are applying for loan modification, as your primary homestead.
