The struggling homeowners who are unable to make their monthly mortgage payments can get a better deal through a mortgage modification from their lender. But often it is considered that the concept is too complicated or onerous and this makes the homeowners step back while thinking of a loan modification. It often becomes difficult for the borrower and the lender to arrive at a point where both benefit from each other’s decision. The main aim of a home owner is to create a repayment plan that can facilitate the debt repayment procedure and save their home from a forced foreclosure. Have a look at some benefits that you may reap if you modify your present home loan.
A temporary interest rate reduction: If you’re not being able to make timely payments on your present mortgage loan, chances are high that you are not coping up with the high interest rates on this loan. If you take resort to mortgage modification, chances are high that your interest rates will be much lower than what you were paying before modification. Reduction in interest rates will help you lower the monthly payments too and you can easily save a considerable amount of money.
An extended repayment period: The repayment period of your loan will also be extended and you can repay the mortgage loan in easy and affordable monthly installments. If you feel you want to repay the mortgage loan earlier, you can even shorten the term of the loan so that you can make extra payments and repay the total balance as soon as possible. Therefore, you can both shorten the term of the loan, or extend it according to your present financial needs.
Helps you avoid foreclosure: You can avoid foreclosure by modifying your home loan and getting back on the monthly payments on it. As the interest rates and the monthly payments will be low enough, you can easily make timely payments on the loan and thereby avoid a forced foreclosure.
You need to write a loan modification letter when you go for a mortgage modification. Tell them about the financial hardship so that they come to know the exact reason that is barring you from making the timely payments. Make sure you repay the loan on time, once your loan is modified.