Principal reduction basically means you have to pay less amount of money than you really owe. You do not have to pay the interest but only the actual amount that you borrowed. The good news is you have to pay less. If you are facing foreclosure then your loan modification attorney can help you get principal reduction on your mortgage loan. But you can’t just avail this facility whenever you want. You need to meet certain criteria and the lender must allow it.
Will of the lender
Any type of reduction depends on the lender to whom you owe money. If the lender is willing to allow principal reduction, only then you can get it. No loan modification company can help you if the lender never allows it. But they can try their best to convince the lender. As such companies are market experts, they usually succeed in achieving their goals. If you know the lender personally then you can contact him/her for allowing principal reduction on your mortgage loan. But if the lender is a financial institution, it would be best to let the loan modification consultant handle it. Remember, despite all your intentions, the will of the lender is what matters most in this case.
Other ways to avail principal reduction
When foreclosure is close because you’ve missed your mortgage payments, you can go for a loan modification company and try to reduce the principal amount or look for a way to pay less than what you really owe. As only the money lender can allow you to pay a reduced amount, there is nothing much you can really do about it. But there are few ways through which you can quickly repay your debt and reduce the amount payable with each installment.
- The biweekly payment method can help save a lot of money if followed regularly.
- You can pay some extra amount with each installment to reduce the principal amount yourself. The extra amount you pay goes towards the principal due.
- If you can, try to pay a lump sum as soon as possible. This will reduce the principal amount and you have to pay less interest.