For most people, their home is their largest investment and -- for some of those people -- that investment makes up their entire net worth. So, when that investment is threatened, it seems as if the whole world is crashing down. This is especially true for homeowners who got swindled into a loan where -- after 3 or 5 years of steady monthly payments -- they saw their payment amount suddenly increase by hundreds of dollars because they were not fully aware of the type of loan that they had signed on for.
Fortunately, there is a second chance opportunity for these homeowners, which allows them to stop foreclosure, stay in their home, and decrease their monthly mortgage payment -- it is called a home loan modification program. A
home loan modification program helps indebted homeowners save their homes by allowing them to restructure their existing mortgage. This should not be confused with refinancing, which often accomplishes the same goal, but often with a completely new loan by a completely different lender; nor with a forbearance agreement, which is a short-term reduction of your monthly payment.
Instead, a home loan modification program gives you the opportunity to renegotiate specific terms on your current loan, while all the other parts of your loan remain the same. So, you may be able to turn that adjustable interest rate into a fixed interest rate, resulting in a more affordable monthly payment, without compromising other favorable terms or switching lenders.
A loan modification program is best for those who know that they will never be able to keep up with their current monthly mortgage payment, but who also want to keep their current mortgage or who don't have the necessary credit scores to be approved for a new mortgage refinancing loan. Furthermore, your lender may be more than willing to offer you this second chance deal, since the likely result of not doing so is a defaulted mortgage.
ABOUT THE AUTHOR
Julie Bonner, an expert in
home loan modification programs, serving the San Diego, CA area.
