A lot of homeowners struggling with their mortgage payments get in touch with loanmoddepot.com to get information about the loan modification options available for them. There are various ways in which mortgage loans can be modified, and each one of them has its advantages and shortcomings.
Any competent loan modification firm presents the available options to the delinquent borrowers and help them make the best decision. A loan modification is advantageous to both lenders and borrowers. For the lender, a loan modification means avoiding the foreclosure process, which is a loss if the borrower is only having short-term financial difficulties. For the borrower, a loan modification can give you sufficient time to bounce back from your challenging situation and resume normal payments.
Extended Time for Payment
A loan modification company will advocate for you to extend the term of loan payment if you’re struggling financially. This will lead to the reduction of your monthly payments without altering the principal amount or the interest rate.
At loanmoddepot.com, they ensure that your mortgage repayment term is extended in a way that you get comfortable in making regular monthly payments. For example, if your mortgage amount is $150,000 with a 6 percent interest payable in 30 years, the terms of payment can be extended to 40 years. So instead of paying $899.33 per month for the 30-year term, you will be paying $825.32 and thereby making profits of about $74.01 monthly.
In the long run, the monthly savings that will accumulate to $900 a year are a substantial amount and the advantage of this outweighs the “disadvantage” of paying your mortgage for 10 years longer.
Reduction in Interest Rate
Although lenders will sometimes offer you to reduce your interest rate on mortgage either on a short-term or a long-term basis, loan modification companies generally don’t advocate for this. A long-term interest rate reduction is given by refinancing the loan whereas a short-term interest rate reduction is given when a borrower is going through a temporary financial crisis. Unfortunately, in both cases, the interest payable will not be written off but added to the back-end of the mortgage.