Overview
Understanding Loan Modification, Mortgage modification is a process where the terms of a mortgage are changed / modified from the original terms of the contract agreed to by the lender and borrower. A modification can result or impact the loan in following ways.
- Reduced interest rate or a change from a floating to a fixed rate
- Principal Reduction
- Reduction in late fees or other penalties
- Increasing of the loan term
- Possibility of Capping the monthly payment to a percentage of household income
When the terms and conditions pertaining to the home loan are changed permanently it is called loan modification. Major modifications sought by the applicants are with reference to reduction in the monthly payment, reduction in the rate of interest, reduction in the total pending amount, exoneration from the penalties due to irregular payments or a blend of all the changes. To summarize, reduction in the monthly payment and respite from the financial crisis is a sign of a good loan modification program
Reasons to Modify
- Lowering your Mortgage Payments
- Lower your Rate of interest
- Reduction in Your Loan Amounts
- Extended Payment Terms
- No Credit checks
- No Appraisal Fees…
Programs Associated with Loan Modification
- In-house Traditional Modification offered by the lender
- HAMP Modification Government Program