If you've fallen behind in your house payments and you are worried about a possible foreclosure - there may be an answer.
If you can currently make your regular payment, but you can't catch up with the past-due amount - you might be able to negotiate with your lender to add any past-due amounts, including interest and escrow, to the unpaid principal balance and then this new amount will be re-amortized over a new period of time.
This type of an agreement is called a loan modification.
There are many reasons that you may want to look into loan modification - although this is not a process that you will want to consider for just any reason, it is one that offers some benefits if you find yourself in a tough situation.
For many people, the process of loan modification never comes to mind. But on the other hand, there are some people who have had to deal with this in order to get their life back on track.
So what are the benefits of loan modification? Here are three that you should keep in mind if you find yourself in trouble.
- If you have missed mortgage payments in the past, but are now back on track, loan modification can help you keep your payments under control. Generally speaking, your lender will allow you to roll your missed payments into a modified loan. For this reason, you will be back on track with the ability to pay the past due amount over an extended period of time.
- Simply put, loan modification can help you keep your home if you are facing foreclosure. As you can imagine, this is one of the biggest benefits of this process. If you can no longer afford your mortgage payment your lender may reduce your rate to make your payment affordable.
- Although the loan modification process is long and drawn out, if it is something that you need to do, it is not nearly as hard as you may think. You will have a lot of help along the way, and if you are willing to make it work, you will definitely want to consider moving through the many steps with speed and precision.
These are only three of the main benefits of loan modification and as you can imagine, there are many others that you will also come across if you are ever faced with this situation.
The loan modification process is not all fun and games. It would be much better on you and your home if you never have to consider looking into this process.
Even though there are companies out there that will help you negotiate your loan modification - you may want to do it yourself. And in spite of what you might think - mortgage companies handle loan modification requests every day.
Just contact your mortgage company and explain your situation. You might be surprised at how helpful they can be.
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