A loan modification is where you can call in to your current lender, if you have an adjustable loan or you have fallen behind in your payments due to what the economy is doing or the values in how much they have dropped or you can not refinance. They will work with you in most cases even those very hard where you feel they are not working with you. They will work with you to try reduce the terms of your current loan or reduce the payment down from your currently at.

This will help you stay in your home, make things better, maybe even free some monthly cash to help you stay in that home and pay other bills that you have to pay. So I wanna give you some tips before you call into that mortgage lender to ask them about a loan modification here's a few things you should do and have prepared before making that first initial call.

Loan Modification Tip #1

Prepare Financial Statement - Create a total monthly tally of you expenses that you pay for your family on outgoing basis that starts of with basics such as utilities, grocery bills, clothing, medical, gas, car payments and credit cards. You want a detailed list of every single expense that your family goes through on a monthly basis.

Average it out over the past 3 months or so if you have some expenses that vary from month to month and prepare that on a spreadsheet. You want to have it prepared because most banks will ask you these questions and collect a financial statement from you before they look at a loan modification case.

If you don't have that prepared you are going to have to call all over again, and being that you usually have to wait from 45 minutes to 1 hr 30 mins in some cases you do not want to get someone on the phone and then hang up because you were not prepared.

Loan Modification Tip #2

Prepare a hardship letter - A hardship letter is basically a one or two page report on why you need someone to look at your loan and modify it. It could be because of a job loss, maybe your income has gone down because your company has been affected by the economy, maybe you are on an adjustable rate mortgage you were planning on refinancing before the adjustment went up in your mortgage payment but being that home values have fallen dramatically you are not able to refinance even with a FHA loan. So you want to be prepared be prepared and have a hardship letter explaining what the reasons are for you asking for a loan modification.

Loan Modification Tip #3

Set aside at least 1 - 2 hours for call - This include the call in time, you being put on hold, going through and talking to the representatives about your financial statement and hardship letter. Let them know that you have everything prepared and ready for them to ask you the questions in order to see if you qualify for a loan modification.

Loan Modification Tip #4

Pay stubs & bank statements - You also want to make sure you have your pay stubs on hand and a bank statement because they are probably going to ask you to fax that in along with your hardship letter and financial statement if they do not take it over the phone.

Loan Modification Tip #5

15 - 60 days turnaround time - Be aware that this could take anything from 15 to 30 days, sometimes some banks take up to 60 days.It really depends on how far behind you are on your mortgage, if you are close to foreclosure those cases are being looked at with priority over the ones that are still pending to adjust on your adjustable loans.

It does not matter where you are in all this if you are making your payments and do not have an adjustable loan but things are tough or you are inadjustable you have not made your payments for 3 months, 5 months.

Even if you have contacted the lender before to try do a loan modification and you got denied or they told you they could not help you. You still can get help, you just need somebody that knows how these institutions work and what it takes to get approved.