Loan modifications can be a great option to avoid foreclosure and lower your monthly payments if you’re struggling with your mortgage payments. Getting a loan modification can require a lot of time and effort. You spend time gathering your documents to apply, applying, and waiting for approval.
The loan modification process isn’t over even after you’ve been approved. There are still a few steps that you have to navigate before you can officially have your loan modification applied to your mortgage.
An attorney can help you through the entire loan modification process. After your application is approved, a loan modification attorney can help make sure that you stay on top of everything so that you can get your loan modification.
If you’re going through the loan modification process, contact Joshua Denbeaux today to learn more about how he may be able to help you.
What Happens After Approval?
Getting approved for a loan modification means that you’re almost done with the loan modification process. Once your loan modification application is approved, your lender will officially notify you in writing. Lenders usually offer a trial payment period (TPP) as part of this notification.
If your lender offers you a TPP, you will go through that trial period before moving forward with your mortgage modification. After you’ve completed your trial period, your lender will send you the final loan modification documents, which you’ll then sign and have notarized and sent back. Once your final loan modification documents have been signed and sent back to your lender, they’ll enter your loan modification into their system.
It’s recommended to have a lawyer review your loan modification documents before you finalize the modification to make sure that everything is correct and that you’re protected.
What Is a Trial Payment Period?
Lenders typically have homeowners go through a TPP before their loan modification is finalized. Some lenders don’t use a trial period and finalize the modification immediately, but this is a less common practice.
A TPP is a trial period before your loan modification that’s intended to test your household income to make sure that the modified mortgage amount is affordable for your household. The trial payment amount is usually similar to or the same as your monthly payments will be under your loan modification.
Trial periods are usually around three months long, but your lender decides their length. Your TPP could be anywhere from three months to a year.
While you are under a TPP, it’s important to stay on top of your payments and make sure you make them on time. Because this is a test for your loan modification, any issues in paying the mortgage payments in this time period could impact your modification.
Things to Consider With a TPP
There are a few important things you should be aware of when making payments as part of a TPP.
Pay Each Month
It’s recommended that you make your TPP payments each month instead of all at once. Sometimes, homeowners want to show their eagerness for the modification and will want to pay off the TPP quickly, but this could actually cause issues. If paid in a lump sum instead of monthly payments, it may be difficult or confusing for your lender to apply the payments correctly. Additionally, paying off your TPP all at once doesn’t help demonstrate to your lender that you’ll be able to consistently afford the modified mortgage payments each month.
Pay The Exact Amount
When making TPP payments, it’s a good idea to pay the exact amount due each month. Paying under your monthly payment amount could hurt your ability to get your loan modification. The money might be applied incorrectly if you pay over your required monthly amount. It’s possible that your lender could apply the additional money to your outstanding mortgage, or they could even apply the whole amount.
Pay Using Method Instructed
Trial periods can be complicated when dealing with lenders’ systems. Your lender should inform you of the best way to make your TPP payments. If paying online, it’s important to pay attention to how you’re paying and be careful. You want to make sure that your payments are applied to your TPP and not to your original monthly mortgage payment amount or your outstanding mortgage payments.
Pay Early Each Month
It’s a good idea to pay your TPP early in the month. Even if your payment isn’t due until the end of the month, paying early is a good way to make sure that your payment goes through correctly and is processed on time. This can help reduce your stress about something going wrong with your TPP and gives you a little bit of buffer time in case there is an issue with any of your payments.
Take Your TPP Seriously
Successfully making all of your TPP payments is the last big step to getting your loan modification. You should receive your final loan modification documents once you make it through this trial period. It’s important to take this trial period seriously because, even though your application has been approved, any issues during this time could hurt your ability to get a loan modification.
Contact a Loan Modification Attorney Today
It’s a common misunderstanding that getting your application approved for a loan modification is all it takes to get one. There are important things that happen after approval that need to be handled correctly to finalize your modification.
It’s helpful to fully understand the entire loan modification process at the beginning so you can have a better understanding of the potential timeline for your modification. This can help you better prepare yourself for all of the steps to get your loan modification approved and finalized.
A loan modification attorney can help prepare you for the loan modification process. Contact Denbeaux Law today to learn more about how we may be able to help you through the loan modification process.