How to Readjust My Mortgage
- 1). Meet minimum qualifications. Homeowners may qualify for a loan modification program if total debt obligations exceed 55 percent of income. For example, if a family’s monthly gross income is $5,000 and total debt obligations are over $2,750, the borrower may qualify for loan modification.
- 2). Contact the lender and complete a loan modification application. This application will ask the borrower to list total debt obligations and other personal information, to ensure the borrower meets the minimum qualifications. The lender may request supporting documentation, such as debt obligation statements, to process the application.
- 3). Wait for a decision. After receiving the application materials, the lender will process the application and provide a decision. If approved, the lender will readjust the mortgage so mortgage payments don’t exceed 31 percent of monthly income. For example, if monthly income is $5,000, mortgage payments won’t exceed $1,550.
- 4). Sign the necessary paperwork. The lender will set up a time to sign a loan modification contract. This contract typically needs to be notarized, so it’ is usually signed at the lender's office. A loan modification is time-specific. For example, a loan modification might have a duration of 36 months. After this time, monthly payments will revert back to the previous amount.
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