A mortgage modification is a process in which the terms of your mortgage are modified from the original terms of the contract that was agreed to by the buyer and the lender. Generally any loan can be modified.
When you can’t afford your mortgage payment, you can get a better deal from your lender. However the process is usually complicated and time consuming and many times the better deals are only offered to those who earn neither too much nor too little income to meet the guidelines.
It is important that the payment be both affordable and pay off the loan. Generally thirty eight percent of gross monthly income is used to calculate the payment and sometimes the lower rate can extend the life of the loan to 40 years or more.
Because a homeowners generally have an attachment to their property, and because a foreclosure disqualifies a homeowner from buying another home for 3-5 years, most homeowners are motivated to keep their home.
If you find yourself in financial hardship, for whatever reason, and unable to make your monthly payment, it is time to look into your options in mortgage modification. Lenders know that circumstances happen which prevent you from making your mortgage payment, but are most interested in how you are going to move forward and make your new payments. Refinancing into a lower interest rate is usually the option that is preferred for those trying to lower their monthly payment.