Mortgage Consultant NY NYC New York Blue Ray

A Loan Modification occurs when a borrower changes the current loan terms of a pre-existing mortgage with a lender.

This modification to the loan most often times results in the lowering of the borrower’s monthly mortgage payment ultimately keeping the homeowner out of foreclosure. Lenders will examine various aspects of the loan when conducting and approving a loan modification, however the most common changes to a pre-existing loan are a modification to the interest Rate, change to the term of the loan, and / or decrease to the overall principle balance of the loan. In most instances it is far more beneficial for the lender to modify the loan than it is for the lender to foreclose on your home.

Many homeowners spend months and thousands of dollars attempting to modify their personal home loans only to wind up not being able to complete a loan modification. This is why it is necessary to have a team of loan modification specialists on your side that will fight for you and get you the best loan modification possible.

Interest Rate Modification

Modification of a borrower's interest rate is a common occurrence in a loan modification. Many borrowers have secured Interest Only and Adjustable Rate Mortgages which increase substantially at some point in time thus making the borrower's mortgage payment beyond the borrower's means.

By modifying the interest rate you negotiate with your lender to lower the interest rate on your loan for a specified period of time which could possibly be throughout the duration of the loan. Our team of loan modification specialists will work closer with your lender and the lender's investor to secure the lowest rate possible for your interest rate. If your interest rate is currently over 6% then an interest rate reduction could be a possibility for you and could potentially cut your monthly mortgage payments in half or more.

Loan Term Modification

Another common modification to a pre-existing loan is a loan term modification. A loan term modification occurs when the lender simply lengthens the period of time a borrower has to pay for their loan. This change in a loan is a very common occurrence, however might not be the most beneficial a borrower. It might not be the most beneficial because in extending the loan terms many lenders attempt to tack on any payments in arrears that were do and the interest still accrues on the outstanding balance of the loan.

On a positive note, the loan term modification can be a beneficial part piece to lowering a monthly mortgage payment and keeping a homeowner in their current home. It should be vigorously negotiated along with other options when attempting a loan modification.

Principal Balance Reduction

Reducing the principal balance of a loan occurs when a lender decreases the principal amount of your loan. This is generally the most beneficial for a borrower because it can have an immediate and profound effect on the monthly mortgage payments. Only through careful research and negotiation with your lender is it possible to determine if this option will be effective for your situation. When issues of predatory lending arise a principal balance reduction and interest rate reduction can be effectively used to position the homeowner in a situation that is mutually beneficial to the lender and the homeowner while keeping the home owner in his / her home.