home loan modifcation question?

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How easy is it to get your lender to modify your mortgage? My interest rate resets next month and the monthly payments will increase. I bought this house as my primary residence but then I moved out and made it a rental home. I rent it for $ 1245 a month. The mortgage is currently $ 1405 (i pay the difference…I could not get it rented for higher). The mortgage will go up to about $ 1650 in September. I can’t afford such a big increase now because of changes in my financial status. I do not want to lose the house and I do not want the people who live there to have to move out. They are good people. They are disabled. They pay their rent every month. Do you think my mortgage lender will work with me? I can’t refinance it because I have too much on my credit now. Any suggestions?
I can’t sell the rental because my house is now worth less then my loan. I will be lucky if I can get $ 160,000 for the house and I owe almost $ 175,000. I don’t know where I would get the extra $ 15k.

2 Comments
  1. Reply
    Jeff T
    May 19, 2011 at 10:40 am

    If you’re paying the difference between the mortgage and the rent, then you are giving $ 160/month charity to them.

    Can you afford $ 405/month in charity, when your mortgage increases?

    If you can’t refinance it, then what do you expect the lender to do?

    My advice: Sell the rental.

  2. Reply
    FRANK Mortgage Broker
    May 19, 2011 at 11:14 am

    You may be able to do what is called a modification of mortgage. That is when the terms of the loan are changed. You can approach lender, advise lender of situation, and see if loan can be re-negotiated.
    Lender does not want to foreclose, especially if loan payoff exceeds property value. Lender usually would rather change terms of loan.

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