Does it seem pointless, or worse hopeless? has your mortgage just adjusted, or is it about to adjust? and the payment is higher than expected. There a lots of companies advertising their services to get a loan modification for you, even many law firms have jumped into the loan mod business lately, and fees can range from $1,000.00 to $5,000.00 or more depending on the company and the size of the home loan.
Probably the most important question you should ask yourself before doing anything about your mortgage is does it make sense? are you in an area that may never recover property values? for example Detroit, MI. it will take an extremely long time to recover if it ever does due to many factors such as the unemployment rate being over 15% and many property values have dropped over 50% combine that with the fact that the main business for the city (automobiles) is in a slump, and you are unlikely to regain a position of equity, this is an extreme example, but hopefully it helps illuminate one reason for not proceeding with a modification.
There are many reasons that you would want to obtain some type of modification to your mortgage, things like;
* You must live somewhere so why let someone else get the tax and appreciation benefits? (even if you are “underwater” the value of your property WILL come back). As a matter of fact some Government officials say the housing market has risen by 1.7% in the first quarter of 2009.
* Credit, a foreclosure will stay on your credit report for 7 years, and gone are the days of bankers lending money to anyone with a pulse, nothing will do as much for you in this market than maintaining your status as a homeowner.
* Although real estate moves in cycles, over the years real estate has consistently appreciated. (look at your parents home for example).
* Tax Benefits since 1986 Credit card interest (except for some types of business use) has not been deductible, but the interest paid on mortgages has.. in most cases even for second properties.
There is almost never a reason to not try to stop foreclosure only in rare cases such as a property located in an extremely depressed area, or like love canal, where the ground itself presents a health hazard or in situations where the household income has disappeared should you even consider loosing your home, it will nearly never help, and almost always cost not only money, but will hurt you in the long run.
Over 25 years in the finance industry, and having modified my first home loan back in 1995 long before the current crisis I put together a concise, inexpensive step by step proven method of changing the terms of your existing home loan making your payments affordable again. Take a look at http://www.loansaverpros.com for more information.
