Loan Modifications in Idaho refers to a homeowner’s attempt to change one or more of the terms of their mortgage because of an inability to keep up with the current payments due to a job loss, illness, variable interest rate reset, or any number of circumstances that may end in the likelihood of a default on their loan.
Successful loan modifications can result in temporary or permanent changes to the interest rate, term, monthly payment, or a principal reduction of the loan.
The goal of loan modifications in Idaho is to allow the loan payments to continue or resume, and provide the homeowner a payment they can afford.
There are various types of loan modificationsA lender can modify and Idaho homeowner’s loan one or any combination of the following ways:
• Reduction in interest rate, or a change from a floating to a fixed rate, or in how the floating rate is computed
• Reduction in principal
• Reduction in late fees or other penalties
• Lengthening of the loan term
• Capping the monthly payment to a percentage of household income
• Mortgage forbearance program
In Idaho a homeowner can request a loan modification from their lender at any time. It is at the lenders discretion at which point they are willing to review a request for a loan modification. A homeowner should be prepared to provide their lender with documentation of their inability to continue making payments or the imminent possibility of a default on their loan. Typically a homeowner in Idaho will be asked to provide a letter of hardship, financial worksheet, bank statements, pay stubs, and their last two years tax returns.
For an Idaho homeowner considering a loan modification it is important to approach the decision objectively. While keeping your home should be a top priority, it is also important to be realistic about your ability to continue making payments once a loan modification is received. You should consider having a professional review your financial worksheet and work with you make sure that loan modification is truly your best option.
