Loan Modification by a qualified attorney can save your home, lower your rate, adjust late payments and fees. You may even qualify for a principal reduction under the Making Home Affordable Program. Recent changes talk about "earned principal forgiveness. The lender may first offer a interest-free forbearance of principal that the homeowner can turn into forgiven principal anually over five years, providing they stay current on their mortgage payments. After the lender agrees to our loan modification terms based on our negotiations on your behalf it is your job as the homeowner to live up to the agreement. Here are some tips to help you stay on top of your budget, manage your debt, and keep your mortgage current.
Remember a successful loan modification is not easy to achieve. It is hard work. This is your chance to keep your home, don't blow it.
#1 Understand your Loan Modification Terms
You may of gotten to the point of foreclosure due to a mortgage loan you did not understand. Make sure you understand the terms of your loan modification. Changes in payments, next due date, rate adjustment periods or any details that are vital to you staying current.
#2 Cut Expenses
Take a good, hard look at your spending records after a month or two have passed. You’ll probably be surprised when you look back at your record of expenses: $300 on ice cream, $100 on parking tickets? You’ll likely see some obvious cuts you can make. Depending on how much you need to save, however, you may need to make some difficult decisions. Think about your priorities, and make cuts you can live with. Calculate how much those cuts will save you per year, and you'll be much more motivated to pinch pennies.
If saving your home from foreclosure is more important to you than a membership to a gym, an upgraded cable package, a extra night eating out, then cut them out. There is at least 10-15% of your current spending that can be cut out.
#2 Save More Money
Subtract your expenses (the ones you can't live without) from your take-home income (i.e. after taxes have been taken out). What is the difference? And does it match up with your savings goals? Let's say you've decided you can definitely get by on $1500 per month, and your paychecks amount to $2300 per month. That leaves you with $800 to save. If there’s absolutely no way you can fit all your savings goals into your budget, take a look at what you’re saving for and cut the less important things or adjust the timeframe. Maybe you need to put off buying a new car for another year, or maybe you don’t really need a big-screen TV that badly.
Saving money now will help if another crisis or hardship comes up in your life.
#4 Create a Budget
Once you’ve managed to balance your earnings with your savings goals and spending, write down a budget so you’ll know each month or each paycheck how much you can spend on any given thing or category of things. This is especially important for expenses which tend to fluctuate, or which you know you're going to have a particularly hard time restricting. Click here for more information on a creating a budget. |
