Can anyone explain what a loan modification is in layman’s terms for me?? All the research Im doing is…?


giving me a headache and Im not seeming to understand. I lost my job for about a month… well, I have THREE children, a wife and A LOT of bills. Going ONE week without a paycheck is very damaging to us since I make a good amount of money but we live a good amount of life. I called the mortgage company and they said I qualify for a loan modification… but they would not explain to me what it even meant! Any help? I already have a very low interest rate 5.8% so I dont see them changing that…
I was already in the rears with them and paying 1/3 more every month just to get caught up.. but at the same time falling behind on EVERYTHING, and was digging myself into a GIANT hole.

  1. Anonymous February 17, 2014
    It's essentially just what it sounds like...a change to the terms of your loan. Very often, they'll lower the interest rate, in order to make your monthly payments more affordable. The tricky part of this is that they may add in a balloon payment at the end of the loan, or set up the rate decrease so that it's temporary, and gets inflated above the initial interest rate, after the temporary period ends. You'll need to ask your mortgage company what their offerings are, for more detailed information.What's particularly nice about a loan modification is that it's not a refinance. You don't need to have the property re-inspected or re-valued, and you won't have points & fees to pay on it. But that doesn't always mean it's the best course of action, so get the details of all of your available options, and consider the pro's and con's of each.
  2. Anonymous February 17, 2014
    Depending on the modification your lender is offering each could be different1. Change the interest rate thus reducing the monthly mortgage payments.2. Add the late payments to the end of the mortgage,thus you are instantly current. You would continue making your mortgage payment at the same amount you are currently making, Your terms would increase. Say you have a 30 year mortgage now which is 360 months. The lender would add additional months to include the missed monthly payments. If you are 6 months behind then an additional 6 months would be added to your terms.3. Add your late payments as a 2nd mortgage thus you would no longer be behind.This type modification would require you to make 2 monthly mortgage payments. You would continue to make your 1st mortgage payment as it is currently. Your late payments would be added together and divided by the number of months you and the lender agree that would be feasible for you, thus your monthly payments would be established.4. Reduce the loan amount to match the current value of the house.These are a few of the modifications possible. Your lender will send you a modification packet. Once you complete and sign the modification application and return it to your mortgage company, the modification department will then make offers to you as which might be best for you. You and the lender would then select one that both might think is better.I hope this has been of some benefit to you,good luck."FIGHT ON"
  3. Anonymous February 17, 2014
    you probably won't get a lower interest rate than you already have. I would ask them for a forbearance to give you time to get a new job so you don't lose your home. Many times this is what they'll do for someone who doesnt qualify for a loan modification
  4. Anonymous February 17, 2014
    I've received a newsletter sometime ago about "60-MINUTE Loan Modification ". They give good tips what to do, you may want to check at this

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