what are mortgage loan modifications?
Deal Score0
Can someone explain how a loan modification works? What are the pro’s and con’s from the home owners standpoint?
Login / Register Submit a deal
No widgets added. You can disable footer widget area in theme options - footer options
Random Posts
- What is better to improve your credit score?My wife and I have two car loans; both are five year loans. One loan is my wifes car and has 13 months to pay off the other has about three more years. We also …
- What is a good paying job that does not have specific qualifications?I graduated from Devry University, Summa *** Laude. With a degree in Management and Communications Networks After college, high school, studied offered me a job where I am the Head of the Technology and System …
- I am in the process of trying to buy a house…?The house needs work done to it but it is a good buy. I was going to try to get a FHA 203k loan but decided that it wasn’t worth it because of the amount …
- Taking out a second mortgage for another home?My husband is a Naval Officer and we purchased our first condo/home a little over six months ago with a VA loan. Next year my husband is changing stations. We would like to buy a …
- I want to go back to school full time but how will we pay our bills?I recently completed my Associates degree in management. I work in real estate currently and make $ 75K a year but it’s SO unreliable and the income is all commission. Plus I work EVERY weekend. …
Random Topics
- Is it illegal for a home owner to make false/misleading statements when selling their home?Husband and I recently went to look at a “for sale by owner” home in rural South Dakota. Prices are dirt-cheap, houses are typically OLD…and we’re well aware of what the typical price range/age should …
- What’s The Best Way To Start Building My Credit History/Score?Hello I recently moved to the US and applied for my Green Card and Work permit. I want to know if the credit history I had back in Mexico is any useful (considering all I …
- Can a lis pendens be put on property after it has already been sold?I bought a piece of property that without my knowledge was in litigation. I’m a bona fide purchaser and a lis pendens was filed a month after my closing. I used a title company and …
- Where can i get a free credit score without signing up for something?Related Posts:How do I get my FREE credit score? I already have my…How do I get my FREE credit score? I already have my…How can I view my credit score for free without…Where can you …
- Not going to believe this!After reading through the forum, I decided to pull up the two addresses of the two homes we have put offers on. * The first one was done more than a month ago. *Major people …
Change in terms of loan. . . loan still stands, still valid, with modifications. . . . generally only modification banks will do is to lower the interest rate. . . .leaving loan otherwise unchanged. . . .still owe same amount on house, but monthly payments decrease due to lower interest rate. . . .
No real negatives for homeowner, only for bank which gets lower interest rate than you promised them, making your loan of lesser value to them. . .
As you’re not changing lenders or doing refi, don’t have all the expenses of refi (title, etc.), quicker, faster deal
A Loan Modification varies in definition by lender but in general means “a permanent or temporary change in one or more of the terms of a mortgagor’s loan, which allows the loan to be reinstated, and can result in a payment the mortgagor can afford”. In other words, your interest rate can be lowered, your remaining balance re-amortized and/or the current term of your loan extended, in order to reduce your monthly payment.
ADVANTAGES:
A successful Loan Modification will give the applicant the possibility of:
1. An interest rate reduction up to 6%
2. The advantage of having the reinstatement amount (total amount of late payments) deferred to the back end of the mortgage and added to the current principle.
3. A reduction in the actual principle balance of the loan
4. Demonstrate to the Lender that they are “pro-active” to the foreclosure process and trying to resolve the situation.
5. Can start a Loan Modification at any time in the foreclosure process and even if you are not even in foreclosure!
6. Has many of the same features of a refinance, without the high cost.
DISADVANTAGES:
You only get one shot at the Loan Modification so you need to get it right the first time. You may need to make a payment to start the Loan Modification between zero and two payments, depending upon the Lender.