One of the most frequent questions we are asked about Home Mortgage Modifications is simply “Can I really Do It Myself?” The answer is Yes! However, this is just like baking a cake. There are steps to take and ingredients to add or the banks will push us through a foreclosure, anyway! There are rules to the game and the banks have attorneys to tell them the rules. We, the homeowners, attempt a Mortgage Modification texas cash out refinance without knowing the rules are definitely at a loss, due to the knowledge the banks have.
A neighbor, recently, told me she was about to call the bank and explain the divorce, reduction in pay, and other circumstances to see what they could do for her. She likes movies, so I asked her: If You were about to get into a fight with Jackie Chan, would a butter knife be enough to help You?
Her natural reply was “Absolutely not!” Mr. Chan has years of necessary physical practice and has learned techniques from many mentors in a wide variety of fields. He has the mental awareness of what our weaknesses and strengths are, so he can aim at our vulnerabilities.
Obviously, the banks have that same advantage over us. Most of us are probably pretty good in our careers, maybe a good teacher, carpenter, architect or doctor, yet the years we spent learning our skills just did not include analyzing mortgages or negotiating interest rates. Those two skills are only a small part of the processes involved in Mortgage Modification, something scary for most of us.
Let me ask You a question, okay? When You are trying to put a bicycle together for Your kid’s Christmas present or trying to use one of those newfangled office copy machines for the first time, don’t You take a look at the directions? I hooked up a computer’s cable and power links for a friend, a few weeks ago, and even though I have done that many times, I still read through those instructions.
The point is that someone with experience wrote out those directions. Before we go to the effort to do something new, why not use their guidelines? I still use an old fashioned cell phone. I am not afraid of an iPhone or a Crackberry, but I know that when I make the change, I will do a lot of study before I even decide which one to purchase!
When we decide to lose weight, learn yoga, run a marathon, or learn public speaking, most of us have learned that getting a coach or trainer will help us do so more efficiently and safely, haven’t we? Looking for someone who has a winning record of effectively helping train others makes the learning pattern much easier, doesn’t it?
Preventing a Foreclosure or Modifying a Mortgage is just the same. There are people who have gained years of experience by writing mortgages, working for banks, and studying the laws involved in Real Estate and Foreclosures, who are willing to help us through those procedures.
A tip here is that a simple refinancing is probably not the right way to go. Refinancing usually means that a few MORE Thousands are included in the totals owed. How can I pay less money per month over the length of the mortgage if I have to pay more principal?
Mortgage Modification might mean simply lowering the interest rate. A $200,000, 30 year, 7% mortgage will shrink from $1330.60 to $954.83 per month if the rate is lowered to 4%. Would saving $375.77 per month make a difference in staying in or leaving Your home? Even if Your home is technically “underwater”, it is still a good place to live, the bank will get all of the principal back – while saving the expenses of foreclosing – and You can survive until the economy revives.
Reducing the principal is a different option, but it often takes a lot more juggling to get this accomplished. In this case, the lender is actually losing cash from the principal, rather than getting a lower return from it.
Sure, someone can make a list of the things we need to do, but, just like baking that cake, how does that let YOU know the priorities and timing for YOUR situation? What are Your options, should You fight it or just let it go? In many situations, the lender helped get You into this mess, how much should You believe their “words of wisdom?”
How have the recent changes in the rulings and laws affected my hopes for qualifying for modifications? Which forms are needed and how is the new payment calculated? Who should I talk to and what should I say when I talk to the lender? What needs to be in the “Hardship Letter?” How will this affect my wonderful relationship with our Friendly IRS?
Yes, there are a lot of questions and confusing details. The real difference comes from having an outline, a workbook giving You a strong sense of peace from being able to see the whole picture, not just bits and pieces, here and there. Having places to ask questions and get up to date answers gives us a foundation from which to work. So, the answer is YES! I CAN DO my Home Mortgage Modification myself!