Do’s and Don’ts of Loan Modification
Applying for a loan is an activity that entails a lot of steps. First, you need to determine the exact amount that you need to borrow, then you have to find out where or from whom you will be borrowing the amount. Once the institution or the person you approached agrees to lend you the amount you need, you both have to agree on the terms of the loan. These include the interest rate, the frequency at which the payments are made, and the allotted time for the borrower to pay off the entire sum.
Thus, it’s hardly surprising that modifying a loan also comes with its own set of rules and steps. In areas like New York, Long Island loan modification is one trend that’s growing among lenders and borrowers. Given an unstable economy and job market, many borrowers have resorted to applying for a modified loan to be able to keep up with monthly payments despite their shaky finances.
While it’s true that Long Island loan modification can spare borrowers a lot of trouble and can even lessen their total debt significantly, rejected loan modification applications can actually make things a whole lot worse.
There are things that borrowers should do to ensure a smooth sailing experience with their Long Island loan modification application. The following are just a few helpful dos and don’ts that borrowers can abide by to bring a favorable outcome:
Do think of a plan B before applying.
Things can go awry if your Long Island loan modification application gets rejected, or if your lender takes too long to decide what to do about it. In some cases, you can get evicted from your collateral property even before your lender decides to reject or approve your application. There are other methods for managing one’s debt, such as restructuring or engaging in a short sale. Consult with a financial advisor or do your own research to figure out the best contingency plan.
Don’t sign any documents or contracts with any loan modification company without first checking the said company’s background.
While there are plenty of helpful non-profit organizations out there that seek to make the loan modification application process easier for borrowers, there are also a handful of bogus companies that exist in the industry. Do your homework thoroughly before agreeing to anything that will significantly impact the status of your loan so that you don’t end up being victimized.
Don’t hide from your lender or from his legal representative.
While it can be uncomfortable and difficult to come face to face with your lenders if you don’t have the means to pay them off, be sure to take their calls and to inform them that you are aware of your delinquencies. It is especially important to keep faith with your lender as you will need their consent if you wish to apply for a loan modification program. Whether or not they agree to favorable loan modifications or not will also depend on how much they trust you to abide by those terms.
Do hire a professional to represent you in the loan modification process if you can afford one.
While you don’t necessarily need your own lawyer to negotiate the terms of the loan modification with your lender, having one around will prevent you from making mistakes that could pull you in further. Furthermore, experienced loan modification lawyers have a higher chance of getting your lender to approve the terms that are favorable to you. They can also help you get a more accurate estimate of the payment amounts that you can actually afford.