TJ explains how loan modification works: a lender lowers your interest rate or extends your loan term to reduce monthly payments. You need to prove financial hardship and have surplus income. Only about 2% of homeowners qualify.
Questions this video answers
15% of total income (must remain after paying all bills).
About 2% of homeowners.
An example given is a reduction from 7% to 5%.
Chapters
Hey, this is TJ with Solutions by tj and if you click that button, you want to know what is a loan modification, right? And I'm going to give you exactly that and more. All I want you to do is subscribe to my channel, click the notification, and let's get right into it. Okay, so a loan modification is an agreement between you and your lender. The lender will either lower your interest rate or extend the term of your loan. So they can lower your interest rate from, let's say you have a 7%, they lower it to a 5% or they'll extend the loan from a 15 year mortgage to a 30 year mortgage. If you have a 30, maybe they'll add 10 years. Either way, whether they lower your interest rate or extend the term of your mortgage, the goal here is to lower your monthly payment and make it more manageable for you to be able to handle. If you're going through a financial crisis, that's the only time they'll do it. You have to be able to prove that you are facing some type of hardship. So a little known fact of how you qualify is your income. Of course they look at your income and after you pay all of your bills, the income that's left over is called your surplus income. You have to have a surplus income of 15%, your total income. So take your total income, multiply it by 15%. That's the amount that you have to have left over in order to qualify. That amount left over after you've paid every bill that you have, including your groceries, everything, everything that's left over. That's one of the main ways that they figure out who will qualify. And guess what, the qualification is slim. I mean only about 2% of homeowners actually qualify for a loan modification because they don't have that, that little bit of information. And of course there's more to it. They look at a ton of different factors. But the goal here is if you get a loan modification, look at the documents, your monthly payment should be lower than it was in the first place. Okay, if you like this video and if I'm helping you at all, if you learn anything, please do me a favor and subscribe and click the like button. Because I want to help reach more people, help, help more people just like you to know what a loan modification is and how you can get approved for it. God bless.
