Thousands of people in this country have been able to avoid foreclosure thanks to home loan modifications. No longer do they have the stress of thinking they will have to face foreclosure, wondering whether they and their children will live. However, Golden State Financial Group have noticed that, despite home loan modifications being available and being used, a lot of people still don’t quite understand what they are. This is why they have felt the need to address two of the greatest myths surrounding these programs.
Golden State Financial Group on Home Loan Modification Myths
MYTH #1 – Home loan modifications are very expensive
We all need to consider where our money goes and what we spend it on. While the economy is doing better on paper, most families still have to work incredibly hard just to make ends meet. And homes come with a lot of extra costs. If, on top of that, they believe that applying for a home loan modification is an expensive process, they are more likely to avoid even looking into it. They worry that they have to go through the expense of an application only to get rejected, leaving them in even more debt.
Some companies that offer help with applications do charge a lot of money. However, it is easy enough to shop around and find one that works for very reasonable rates, or that even offers the initial work for free. This means that they will only charge you if your application is successful and that there are no upfront costs at all. Once you are approved, there are usually some very interest options to pay that fee as well, such as simply adding it to your new reduced monthly payment.
MYTH #2 – You only need a home loan modification if you are facing foreclosure
This is perhaps the biggest mistake of all. A lot of people believe that, in order to apply for a home loan modification, you must be about to lose your house. They think that is only for those trapped in an extreme cycle of debt and who have nowhere else to turn to. This is a huge myth, and one that is completely untrue. Indeed, anyone can apply for a home loan modification.
These programs are designed to adjust what you pay each month so that it is more suitable to your current financial situation. This means that your monthly payments become more affordable, and you can loosen the belt a little bit. There are different ways in which this is achieve, such as lowering your interest rate, increasing your repayment term, or even writing off some of the principal.
The reality is that financial situations change. Perhaps you have an unexpected medical bill. Perhaps your employer stops overtime provisions. Perhaps a family member is out of work for a while. In any of those situations, you should consider a home loan modification sooner rather than later, thereby ensuring you don’t end up in a financial mess.