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What is the purpose of a loan modification?
A loan modification is a temporary or permanent change to a loan contract agreed to by both the
lender and the borrower. The lender modifies an existing loan in an effort to help the homeowner
in a time of documentable hardship. The ultimate goal is to make the loan affordable for the long
term. Usually loan modifications come in the form of a rate reductions and fixing the interest rate
for a certain period of time.
Loan Modification: Is It Right For You?
Life can be unpredictable at times, with new expenses rising up out of nowhere. Whether a life
event or major change occurs or you lose your job, many things in life can cause you to fall
behind on your mortgage payments. That being said, just because you're having trouble now
doesn't mean you have to lose everything. You maybe be able to qualify for a Making Home
Affordable Loan modification that could help you without putting your home at risk.
What is Loss Mitigation?
Loss mitigation is a process that often goes along with loan modification. It is used in an attempt
to lessen the amount of damage typically caused when you default on your mortgage. Essentially,
new terms are agreed upon by both the lender and the borrower that ensures the lender receives
their money back and the borrower can make their monthly payments.
What is Loan Modification?
A Loan Modification, otherwise known as mortgage modification, mortgage loan modification,
or home loan modification is the process of modifying your existing loan to make your payments
more affordable. The purpose of a loan modification is to provide you with a mortgage payment
you can afford. It's actually very similar to a mortgage refinance but instead of finding a new
mortgage that you can afford, this just modifies your current mortgage into something you can fit
into your budget.
Why Loan Modification?
Loan modification is very helpful to those in times of great financial distress. It offers numerous benefits and can get you out of debt. Some of the primary reasons for a loan modification are to:
• Lower your monthly payments
• Lower your interest rate
• Fix your adjustable rate
• Reduce your loan balance
• Waive negatively accrued interest
• Grant extensions on payments
• Re-amortize loan to include past due payments
• SAVE YOUR HOME
Who Can Use A Home Loan Modification?
It depends on what your current situation is and who your lender is. While most lenders follow
the same standards and have the same rules when it comes to loan modification, some do vary.
They can easily let you know if you qualify for loan modification. Typically, however, the most
common standards include having missed a payment, having experienced a recent financial
hardship or change, owning a property and not having filed for bankruptcy. Other factors may
come into play, but these are the basic rules you'll need to follow.
To get started on a loan modification today, and see what programs may be available for you
including recapitalization programs, pay rate reductions, principal reductions or other offers
lenders may have, please contact a representative of the Firm today at (702) 871-2200. |
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