About 75% of all companies based in the United States are either small companies with a minimal number of employees or home based businesses run by individuals or families together. The number of small or home based businesses has been growing at a faster pace than larger companies who employ 5 or more employees.
But the mortgage crisis which has plagued the country for 2 years now has had an adverse effect on the small business industry as well. Since a lot of small business owner’s work out of their home office, if they default on their existing house and it results in eventual foreclosure, it means along with their homes, they lose their business office as well.
In fact, the worsening mortgage situation for most homeowners has even resulted in less investment in their existing businesses. Homeowners are confused whether to put their money in the business to meet their working capital requirements or use the same money to make sure they pay their monthly mortgage payments on time and thus save their home as well as their business. If they stop putting money into their business, they do not put themselves in good position to be able to support themselves and pay their mortgage payment and additional expenses.
The problem that most home based businesses face is that if they use money which should have been spent on their business to save their homes, the business is adversely affected as it is under extra pressure to perform and service clients with the limited resources available. At the same time, if they use the money on their business hoping to make an extra profit eventually, they may lose their homes before that happens especially with most businesses losing clients due to the worsening economy and job losses.
In this scenario where a homeowner is struggling to meet their mortgage requirements and at the same time have a somewhat profitable business still running, a home loan modification could be the answer to their problem.
By getting a home loan modification, homeowners will have a lower monthly mortgage payment to make and the money saved could be used to run the business and make sure existing clients are serviced properly. In addition, the money save could be used to focus on customer acquisitions and marketing their businesses.
Of course, homeowners should make sure they apply for a home loan modification before their small business is in trouble and begins to lose money. Just like banks look for people who still have their jobs to approve loans, as far as business owners are concerned, they need to make sure they still generate income to show they have the ability to make a monthly payment in event their mortgage loan is approved for modification.
Homeowners who have a home based business and are not sure whether they qualify for a loan modification should consult with experts in the field to know what can be done for their unique situation. There are companies that do not charge upfront fees to homeowners in order to check if they can qualify for a mortgage loan modification and go out of their way to negotiate with the mortgage lenders to get the modification application approved.
Recent studies have shown that any homeowner trying to put money in either their mortgage or their business often end up losing both especially if their mortgage situations are worsening by the day. Without a profitable business, you won’t have your home and without a home, you won’t have a business. So it is advisable for homeowners to check with a consultant immediately to see if they qualify for a loan modification.
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