Financial challenges affect many Americans, whether from a sudden change in circumstances or a gradual descent into debt. In fact, they are so common that, according to Forbes, one in four people in the U.S. deal with symptoms resembling PTSD as a result. If you are in this group, you may be looking into options to mitigate the burden of your financial responsibilities. Mortgages are one of the biggest expenses for many people, so a modification may seem ideal.
Mortgage modifications are, indeed, the right choice for many people who are in need of relief from their debt. There are a few reasons, though, that your lender may deny your application. The following are some of the most common.
You already have one
Typically, borrowers who have received approval for a mortgage modification cannot get another within a year-long period. Your lender will only approve one modification within this timeframe, even if your circumstances have changed drastically since the company granted the last modification. You may be able to avoid foreclosure, however, by applying when you are eligible again.
Current terms are affordable
When you apply for a mortgage modification, your lender will want to see proof of your current income as well as an explanation for your request. If your bank statements, taxes and pay stubs indicate that your monthly payment is affordable, they are unlikely to approve a modification. This is why it is important to provide support for your case and document any circumstances making your mortgage unaffordable.
Hardship is not proven
In many situations, loss of employment or a major illness contributes to a person’s inability to pay a mortgage. These are examples of financial hardship that you should submit to your lender with documentation in a request for modification. If you do not sufficiently prove that you have faced financial hardship, a lender may not see any reason to lower your monthly payments and grant a modification for your loan.