Here are some important tips that will help you eliminate some of the confusion and frustration if you wish to apply for a DIY loan modification with your lender to get a lower monthly loan payment.
If you are facing a financial hardship and are having trouble making your current mortgage payment, a loan modification can be the answer to help you stay in your home.
You lender may agree to modify your current loan to a lower interest rate, a longer term, include missed payments and late fees or allow principal forbearance to arrive at an affordable payment to help you stay in your home.
Unfortunately, not all borrowers will qualify-but you can increase your chances of success by following these 7 TIPS to help you qualify for the help you need and deserve:

1. Review all of your current debts and obligations to get a clear understanding of what is required to be able to afford to stay in your home.
   Determine what expenses can be cut and what is the actual mortgage payment that you could afford to pay now and in the future.
   This is called your target payment and it is critical to use this figure as your goal when negotiating your loan workout.
   
2. Once you have a "target" payment that will accomplish your goal, verify that your total housing expenses-principle and interest, taxes and insurance do not equal more than 31% of your gross monthly income.
   Divide your total monthly housing expenses by your households gross (before deductions) income to arrive at this percentage.
   Adjust the payment if necessary to meet this federal guideline.
   
3. Write a general timeline of the circumstances that caused the financial hardship and use that to explain to your lender why you fell behind, what plans are in place to correct the situation, and to assure them that you are a sincere and motivated homeowner who does not want to lose your home and will not fall behind again if granted the DIY loan modification.
   
4. Provide proof of your hardship to verify your claims-for example if your hardship is due to medical reasons, provide copies of the medical bills, this will further solidify your claim of financial hardship and help convince your lender to help you.
   
5. Take the time to complete the financial statements accurately-make sure to include all of your debts, obligations and income.
   Your bank will check your credit report and bank statements to verify this information.
   Eliminate any unnecessary or frivolous expenses on your new budget-use a Proposed Financial Statement to demonstrate your new affordable budget to your lender to assure them of your intention to remain current.
   Items like your groceries, gasoline, miscellaneous expenses can be adjusted if needed so that you prove you can afford the new mortgage payment.
   
6. Provide your lender with your proof of income, pay check stubs for W2 employees and tax returns for self employed.
   Also send in your most recent bank statements for all accounts, checking, savings and investment.
   TIP: having large, untapped reserves may indicate to your lender that you are not in a financial hardship situation.
   A general guideline is to have no more than 3 months of reserves in your bank accounts.
   
7. Make sure that all of the forms are prepared accurately and put it all together into a professional, acceptable DIY loan modification package.
   You want to present your situation in the best possible light to meet your lenders requirements to get the help you need.
   

While there is no guarantee of a successful outcome when you apply for a DIY loan modification, you can increase your chances of success by taking the time to research, learn and prepare before contacting your lender.
Understanding what your bank is looking for to qualify you for assistance will allow you to complete your loan modification application properly and increase your chances for success.
Once you have the knowledge and resources to help you put together your own DIY loan modification, you will be on your way to secure home ownership once again.
The federal programs have made it easier for homeowners to work directly with their lender, since the guidelines are standard for everyone, either you qualify or you don't.
You simply have to know those guidelines, then make any adjustments to your budget so that you have the best chance of fitting into the approval criteria.
You can use a software program designed just for homeowners that will do all the calculations for you automatically.
Save time, avoid mistakes and be certain that your figures are accurate and acceptable.