What Is a Loan Modification?

A loan modification is an agreed upon change to your existing loan contract by the lender and you, the homeowner. The purpose of a modification is to help you keep your home and to keep your home affordable. The most common form of loan modification is a reduction in your interest rate, fixing the rate and reducing your mortgage payments.

In the past, lenders agreed to loan modifications only when a borrower was delinquent and suffered a hardship such as a job loss, divorce, illness, etc. Today, lenders are able and willing to agree to loan modifications based on the type of loan (Adjustable Rate Mortgage) and the increase in payment of these loans. However, your ability to obtain a loan modification is greatly affected by when you begin negotiations with the lender for the modification. The sooner you begin the better your deal is likely to be.

Time is of the essence.

A key factor in successful loan modification is that the borrower can afford their home at a reduced interest rate and payment. Remember, it is the reduction in payment and interest rate that makes the loan a modification. When payments go up and loan balances go up – the loan is not modified. In that case, the loan balance is simply increased to repay any past due payments and charges. True relief comes from a reduction in payment and interest rate.

Contact us today for a free consultation, we will discuss your options with you. We will help you keep your home and keep your home affordable. Help is just a phone call away 702-966-5660