Question by Techie Mom: Does layoff qualify us for mortgage modification?
My husband was laid off from his job two days ago. Prior to this, we were considering refinancing (our current mortgage is at 6.625%). I am wondering if this layoff instantly qualifies us for some type of special rate/terms in a refinance or loan modification or if we should just continue with a conventional refinance? We don’t want to miss out on anything that would help us out financially, but we also don’t want to wait on something conventional only for rates to shoot up again.
Answer by Ms L
A modification is done if at least one person can prove they have a job to repay. Some banks only allow $ 500 to $ 1000 in surplus to qualify for a modification meaning you have to show you can pay something. A modification may take up to a month or two. I have known some to take up to 6 months. In the meantime your mortgage could go into default an start of a foreclosure issue. Doesn’t matter what happen if you have a hardship case but you have to have some type of money coming into the home so that they can adjust your mortgage to what you are bringing home. You will have a pre modification agreement and once you satisfy this you get your modification. A pre modification is three months of a small payment on time.
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