What questions to ask about a home loan modification?
December 8, 2011 12:33 PM Subscribe
What questions do I need to ask before applying for a mortgage modification?
posted by anonymous to Work & Money (6 answers total)
My spouse & I bought our first home in Ohio in 2007. We still live in it, and intend to live there for at least another 5 years (probably more). We have decent mortgage terms, though our interest rate is above 6%, and our mortgage is owned by our credit union, though it's serviced by a loan servicer.
In 2010, my husband got laid off and was out of work for about 6 months. When he went back to work, it was in a different field -- he's been employed full-time for most of this year, but he makes considerably less money than he did before. (I'm employed full-time as well.) So our income has changed drastically since we bought the house. On top of that, the county currently values our home at about $30k less than what we paid for it -- we're underwater. Our credit union has said that they can't offer us a refi, but that they would be willing to work out a loan modification, particularly given our change in income (which constitutes "hardship" status, apparently - I think we meet the mark for our mortgage payment being 31% of our monthly gross income). We've never (even while spouse was unemployed) been late with a mortgage payment.
We have the packet from the servicer to get this underway, and I'm about to call them to work through some questions I have, but I want to make sure I'm asking all the pertinent questions! The most I can think of are the obvious questions about terms/interest rate/etc, and whether or not successfully modifying the mortgage will negatively impact our (very good) credit score. What else should I be looking into or considering?
Should you need it, throwaway email: ohiomortgagequestion AT gmail.com