If you have been facing hard times clearing your mortgage dues? If you have been having a lot of defaulted payments for your mortgage recently? If you have been piling up such financial troubles for the past few months, then mortgage modification is just the right solution for you.
Mortgage modification is generally applied to the loan that is taken on any kind of property. However, this property should be owned and resided by you. The loan you have taken on your property allows you to be a debtor to your creditor till your loan has been cleared with the pre-decided interest rate. This kind of a settlement often finds the debtor in a fix, as he has to pay with the pre-decided terms till the entire outstanding loan amount has been cleared. This payment goes in the form of monthly payments to the creditor. Mortgage modification helps if you have been on the verge of a financial breakdown because of the loan you have taken.
Benefits of loan modification
It offers many benefits which can help you in settling your loan without having a nervous breakdown. You can apply for this loan modification process if your monthly mortgage payment exceeds in at least 31% or higher than your gross monthly income. If you have found yourself in such a situation then you can consult your lender for the loan modification program. According to this program you can change your monthly mortgage payments and lessen them, or you can change your interest rate, you can even modify it from a floating value to a fixed value, or you can change your repayment term and even change your outstanding or principal amount.
Disadvantages of loan modification
Apart from the benefits stated above the biggest disadvantage that this program has is that the approval and processing of this program is completely at the lender’s disposal. Also, this program can have little or no impact on your credit score. You will also need to pay processing and legal fees in order to avail this program. The borrower may require paying tax if the principal amount is reduced.
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