If you've fallen behind on your mortgage payments, your lender may be offering you the chance apply for a loan modification. In a loan modification the lender makes permanent changes to the terms of your mortgage resulting in a more affordable payment. Keep in mind that while a mortgage modification will reduce your payment, it will not reduce the amount you owe on the property.
IN FACT, IN ALMOST EVERY SINGLE INSTANCE, A LOAN MODIFICATION WILL INCREASE THE BALANCE OF YOUR MORTGAGE.
This is the main reason most loan modifications ultimately fail, and you should carefully consider the consequences of taking one. Read on to see if a loan modification could be a solution for you:
IS A LOAN MODIFICATION RIGHT FOR YOU?
A loan modification may be a good choice if:
A loan modification may not be a good choice if:
While a loan modification may be a choice for some, If you have negative equity in the home and see yourself needing or wanting to move within a few years time, a loan modification is not likely to be a good solution for you. A failed loan modification or a forced or desired move in the near future will ultimately lead you right back around to the same choices you face today: Foreclosure, deed in lieu, or a short sale. We can help you navigate your options.
Last Updated on February 14, 2022 by Minna Reid