Frequently Asked Questions
Q: What is a Loan Solution?
A: A Loan Solution is when the bank allows a change in the terms of your existing mortgage. The purpose of a solution is to lower your monthly payments, for either a temporary or permanent period of time to make it more affordable based upon your current financial situation.
Q: Who qualifies for a Loan Solution?
A: Anyone that is having trouble paying their existing loan may qualify for a Loan Solution. In today’s housing market, Banks are willing to work with mortgage holders who are having trouble paying their mortgage. However, homeowners with a high probability of getting a Loan Solution are those currently in an adjustable rate mortgage, who have a higher than market interest rate, can’t refinance due to credit or equity challenges and/or are experiencing any kind of hardship.
Q: Why will it work for me?
A: The government has asked for ALL Lending Institutions to do their part to help in the foreclosure epidemic and adjust mortgages for all troubled homeowners. Going to your Lender, servicer or bank with a properly structured file by a Guideline Specialist, will make a scary process seem much more simple and will increase your odds in obtaining a Loan Solution.
Q: Can I do this myself?
A: Of course you can. But do you have the time and expertise? You can also do your own taxes; however, if you are not current on the tax code, you may not get the best result. Hiring an expert saves time and frustration and typically provides the greatest outcome.
Q: What if my credit is bad?
A: A Loan Solution is not based on credit. The Banks are trying to make a good loan out of a troubled loan.
Q: What should I do if I’m already behind?
A: Stay in contact with your bank and let them know it’s your desire to stay in your home. Don’t disregard their calls as it sets the wrong tone and gives the impression home ownership is not a priority. Banks want to help those that sincerely want to help themselves.
Q: What if I have no equity or I am upside on my home?
A: It does not matter! Some Banks are doing a principal reduction, which means the bank will discount the total loan amount to the current value of your home or close. Most Banks or Lenders rarely do this.
Q: What if my income is too low?
A: You will need to show the bank that you and all others in your household together can afford a new, lower payment.
Q: What should I expect the terms to be on my new loan?
A: Banks are rapidly changing guidelines for Loan Solutions. A bank will typically adjust your payment so you can afford to pay on time every month. This can be accomplished by lowering the interest rate, payment rescheduling, principal reduction, extending the term or any other adjustment that will make and keep the loan a "performing loan".
Q: How much can I save by doing a Loan Solution?
A: You can save hundreds or even thousands a month, depending on your loan amount. Remember, a loan is typically for 30 years. So the Loan Solution that saves you $500 a month really equals $150,000 over the life of the loan.
Q: Does every bank offer Loan Solutions?
A: Most all Banks do some form of a Loan Solution today. We are in a housing crisis and most Banks are willing to work with clients to help them save their homes.
Q: How long does the process take?
A: Every bank is different, but it typically takes 60-90 days or more. The time frame constantly changes based upon your Lender’s current backlog of requests.