There are two types of mortgage modification loan options that you could take advantage of: one is from the government, and the other comes from your original mortgage lender. It’s wise to look into both options when you are looking for information about mortgage modification.

The government program is part of the Making Home Affordable program. A $75 billion Homeowner Stability Initiative will provide incentive payments to your lender to motivate them to modify your mortgage loan. They are instructed to lower interest rates and extend the loan term if necessary. Ideally, they want to arrive at a monthly payment that is no more than 31% of your gross monthly income. This is one option for getting more affordable monthly payments through loan modification.

The second option is through your lender. Program details vary from one institution to another, but in general they will work with you to lower monthly payments to a certain percentage of your gross monthly income, around 40% or so.

There are both non-profit and profit mortgage modification companies to assist you in the application process. It can be hard to assemble and organize all the necessary paperwork to apply for mortgage modification, so these companies are in business to help. Just make sure you only do business with a reputable company.

Applicants for a mortgage modification loan must meet a certain number of guidelines to be eligible. They must live at the home (in other words, no second homes or investment properties), and they must have a mortgage originating before January 1, 2009. Some programs will have restrictions on how much unpaid principal can be on the loan to be considered for mortgage modification.

If you’re worried about losing your home to foreclosure, or have already fallen behind on your monthly home loan payments, don’t wait to look for mortgage modification information. Time is of the essence if you want to preserve your home.