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What Is A Mortgage Loan Modification?

By Kevin Landis

Mortgage Loan Modification is when your lender complies to make a change that is permanent with the original terms of your mortgage loan.

What Kind of Changes Can be Made?

This kind of change in your loan could be a reduction in your interest rate, extending the life of the loan—for example to a 40 year loan—that will reduce the payment, changing the loan terms, or fixing the rate on an ARM loan. The basic reason for a mortgage loan modification is to make it easier for the borrower to make monthly payments on his or her home.

What About the Lender?

The lender often agrees with this kind of loan to keep the money due on the loan to continue and they don’t want to foreclose a home because that is not in their best interest and in reality, it is not their business to do so. In addition, it will be individual circumstances that will decide if this kind of loan modification can be done. However, the lender will ask certain things of you before a loan modification can begin.

What to Keep in Mind

There are things to keep in mind before initiating this process. To ensure that the process goes well for you, prepare yourself before talking with your lender. Put together in a folder the following documents: your monthly income and the source of your income, monthly expenses, bank statements, paystubs and loan statements and agreements. Organizing and then taking these documents along will help speed up the process and show that you want to be considered for the type of loan.

How Long Does the Process Take?

Usually, the mortgage loan modification process takes several hours to request the mortgage. Once the loan request has been made, it usually takes several weeks before the bank takes action. During that time the bank may ask you to continue making payments in order to quality for the mortgage modification.

Related posts:

1. How Do I Get A Loan Modification On My Mortgage?
2. What Is Mortgage Modification?
3. Can I Get A Mortgage Modification On My Second Mortgage?
4. What Is Obama’s Mortgage Modification Plan?
5. Why Can’t I Get A Loan Modification To Lower My Mortgage Rate?