Thompson Law Group, P.C.

Will mortgage loan modification help me?

Mortgage loan modification is an option for those who become unable to pay their mortgage. This could be due to a decrease in income or other unexpected expenses that come up and prevent someone from being able to make full mortgage payments.

Essentially, a mortgage loan modification changes the agreements in the loan contract to help you avoid foreclosure. This is not the only option if you are struggling to pay your mortgage, but it can offer a few solutions that ease the financial strain on you.

How does loan modification work?

There are a few ways you and your lender can modify a loan agreement.

1. Interest rates on payments can be lowered if your credit has improved since you began making mortgage payments.

2. Missed payments can be moved to a later date or added to the overall balance.

3. Your loan time can be extended so that each monthly payment is lower.

You and your lender will have to discuss your situation and decide on a course of action. The modification to the agreement may depend on how long your situation will or could last, since short-term hardships, like unexpected payments for the month, are different than a long-term change in your financial state.

What are the pros and cons of loan modification?

Pros: There is usually very little cost associated with loan modification. Some fees may apply, but they are often small and are not required immediately. Loan modification also eases your financial burden, reducing stress and giving you a chance to rebuild without worrying about foreclosure.

Cons: Loan modification can negatively affect your credit history and potentially make it harder to get loans in the future. However, if you have a good credit score and history, this is less of an issue. There are also many scams associated with loan modification, so be wary when pursuing it.

What will I need if I want to pursue loan modification?

The more organized and prepared you are, the smoother the process will be and the more likely you are to receive a loan modification. You should have as much of the following as possible:

· All income and expenses organized

· Property tax info/tax returns

· Past mortgage/bank statements

· Pay stubs

· Proof of ownership of the property

The mortgage loan modification process can be quite complicated. If you have any questions about the process, your options, or whether loan modification is right for you, you can contact a mortgage loan modification attorney for a free consultation.

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