If you are trying to find a way to avoid foreclosure, you might be available to lower your monthly mortgage payments through a loan modification. Under the current federal government's plan, there are several programs available to homeowners who qualify for loan workouts. This is estimated to have with as many as 5 million homeowners! How do you find out if you are eligible? Here are some guidelines on the qualifications and how to apply for a loan workout with your lender.

First of all, not all lenders are participating in loan modification programs, neither are the obligated to modify your loan. Only if they deem your case in their best interest, will they be willing to help you. What it all comes down to is that the bank will help you so long as they lose as little money as possible. Because home values have decreased at alarming rates, modified loans enable banks to lose less than if homes are foreclosed. Even so, you will have to be able to convince your lender that providing you with a modified loan will be the best solution possible for both sides. If you are able to reflect this in your circumstances and plan to make it work without later defaulting on your loan, the bank will be more obliging to help you.

Applying for a mortgage loan modification requires completing an application. But make sure you are thoroughly familiar with all the guidelines ahead of time, to avoid delaying the process or being denied for failure to follow all the steps. You are only given one opportunity to apply, so you have to plan accordingly. What you include on your application is vital to your approval, as the information will be reviewed. So if you are able to show your lender exactly why you are qualified for obtaining a modified loan, you will be more successful. How will you be able to pay the lowered payment? What is your home's property value is it the same or less than the balance of your loan? You can have a realtor prepare a Comprehensive Market Analysis report to provide to your lender.

Review all your paperwork before submitting the application. Have you included all the documents requested? Are the forms thoroughly completed? If your paperwork adheres to the lender's guidelines, your file will go through the necessary channels to become approved. It will not be a quick process, however, and you will need to be patient. But so long as you have done everything you can on your part, you will hopefully be looking at a new loan modification for your home.