What you need to do to qualify for a mortgage modification:
1. The mortgage must cover your primary residence.
Unfortunately, mortgage modifications cannot be made on a second home, a holiday house, or real estate purchased for investment purposes; this financial instrument was designed for those who want the loan covering their primary place of residence adjusted. Simply owning a second property will, in fact, limit your chances of receiving aid from the mortgage modification program.
2. When dealing with the bank, tell it like it is.
When handing over personal financial information, it is of the utmost importance that you are completely honest- the bank will base any new agreement upon this information, and it's in your best interests to not hype or underplay any aspect, tempting though it may be. Remember, these guidelines exist to help you- trying to cheat the system won't get you anywhere.
3. Your loan is going to cost you 30% of your income.
The national guideline for newly modified mortgages is 30% of what you and your spouse earn, collectively, per month. Yes, this may seem excessive- but if you do the math, you may well find that you're currently paying more than that. Also, beware of "hidden" costs, such as legal fees or additional administrative bills.
Depending on their confirmation and security protocols, some banks or financial institutions may require more information than others, which may leave you feeling interrogated. Remember that you're not asking for charity, nor are you a criminal- you're still a legitimate customer, and the government pays a commission to your bank for signing you up. Look at various financial institutions and banks, taking into account interest rates and time frames offered. Remember that you haven't signed their agreement until your name is on the dotted-line; take the time to do the research.
Make sure that any agreement is reviewed by someone impartial, preferably with legal experience. Even if this requires the use of a paid lawyer for an hour, it is definitely worth the cost and the time- closing any possible loopholes and limiting any possible fee-hikes is well worth it. Also, remember that contracts are agreements that exist between two parties- if you are not happy with what's written, you do not need to sign.