There are millions of homeowners across the country who are are struggling to make their mortgage payments or even late on their payments. Many of them have heard about loan modification, but how does it work? Is it hard to get one? Do you need a company to lower your mortgage payments? Read on and find out.

Loan modification is not rocket science. However, it must be pretty difficult to get approved. Out of the estimated 6 million plus homeowners who need one, less than 400,000 have received a loan modification under the Obama Mortgage Plan. That's a pretty low number! Why is this, you ask? Well, there are several factors involved, but one really major one.

Most homeowners start struggling to make their payments or fall behind and then just call up their lender and ask for help. Your lender will then transfer you to the loss mitigation department and they will start asking you a series of financial questions. If you were prepared and answered these questions correctly, you would most likely get approved. If you panic and start making yourself look like you are dead broke or have tons of money, you will be denied. This is a fact. Your financial information is very important to getting approved.

Now, there are other factors involved as well and that is what makes loan modifications so tough. Every persons situation is unique. One thing is certain, no matter what your hardships are, you have to have an income coming in to get approved. Your lender will not modify your loan if they know you don't have enough money to make the new payment.

So, the question then comes up, "Do I do it myself or hire a company to do it for me?". This decision also has many variables that determine the outcome. Can you afford to pay a loan modification company? Do you have the time to call your lender and prepare your modification packet yourself? Do you understand the current guidelines your lender requires for approval?

A loan modification company will know exaxtly what to do to get you approved, if you pick the right one. New laws are being passed that protect homeowners from scandilous loan modification companies. In California, SB94 just passed and now companies are not allowed to take upfront fees. This means that you only pay for success (A lower mortgage payment). That's a pretty good deal. They know what a good loan modification is, when to take the offer and when to keep negotiating with your lender. They know what expenses show up on your credit report and have to be accounted for on your income and expense sheet. And finally, they charge for this knowledge. You can expect to pay around $2500 right now and if you have a substantial mortgage payment it is worth it. You can make that money back from your monthly savings within a few months in some cases.

But, there is also the option of doing it yourself. This takes a little patience and time, but it is entirely possible. You don't have to have an attorney to get your loan modification approved. But, you do need to know how to prepare your files. Once you learn how to do this, you are on your way to getting lower payments that you can afford.

Here is what I suggest. If you have extra money, check out a loan modification company. Here is a list of the top companies and reviews of them --->Loan Modification Companies

If you don't have $2500 or so to spare, try to do it yourself. Here is the best program out right now that explains exactly how to do it. You can download all the forms and watch videos on how to get your loan modification approved. It's very affordable (much less than $100) and it works. The link is here ---> Do My Own Loan Modification

If for some reason you get denied or the loan modification is not good enough (you still can't make the payments each month with what they are offering you), then you can go back and use a loan modification company to help you. You will only pay for success, so there is no risk of getting scammed anymore.

I DO NOT suggest doing this on your own if you are more than 90 days late on your mortgage! This is when you need a professional right away to make sure you don't lose your home. With some modification programs, your mortgage is frozen for 90 days --allowing time for the modification to be completed. You do not want to mess around trying to get a loan modification on your own and then find out your house has been sold at an auction. This does happen.