Individuals who are having difficulty paying their mortgage often think that they have no options but to let their home go. This isn’t the case though. The process that lenders have to go through to foreclose on your home is quite expensive and involved. This often motivates them to want to try to work with you to help you stay in your home. A loan modification may be an ideal option for you to pursue to get back on track with making timely mortgage payments once again.
A loan modification isn’t the same as mortgage refinancing. Homeowners seek out a change to the terms of their existing loan as part of the modification process. Those individuals who move forward with the refinance process end up replacing the original loan that they had with a new one.
There are many different loan terms that a homeowner can request to have changed as part of the loan modification process. They can ask for the interest rate to be lowered or for it to be modified from an adjustable to a fixed one. Homeowners can also ask for their mortgage term to be extended. The ultimate decision as to whether to allow you to modify your loan is your lender’s.
Not every Washington homeowner is guaranteed the right to seek a modification of their mortgage. Most lenders will require their homeowners to be on the verge of defaulting or already delinquent in making payments to qualify for this debt relief option. Borrowers who can show evidence of hardship are most apt to convince a lender to allow them to modify their loan. If you’ve recently fallen ill, become disabled or lost a spouse or job, then you may be in dire financial straits. This may motivate them to try and work with you.
While the idea of being able to seek out a modification of your loan may appeal to you if you’re struggling to pay your mortgage, it may not be ideal for you. This process carries with it many downsides. One of those is that it will get reported to the credit bureau. This may impact your score and thus your ability to secure other loans. A Chapter 7 attorney here in King County can advise you of additional pros and cons associated with loan modification and help you decide whether it’s ideal for you.