If you’re ready to take advantage of a lower interest rate, refinancing likely comes to mind, but if you’re having trouble making your mortgage payments, a loan modification can serve a similar purpose and comes with unique benefits. The better you understand the process, the better prepared you’ll be to make the right financial decisions for you. If you’re considering a loan modification, an experienced South Carolina loan modification attorney is standing by to help.
Loan Modifications
When you refinance your mortgage, you – in essence – pay off your current mortgage and install a new one in its place. A loan modification, on the other hand, is a means of directly changing the terms of your current house loan. Loan modifications are best suited for those who are having difficulty keeping up with their mortgage payments – because credit scores can be negatively impacted. If you obtain a favorable loan modification, however, it could save your home and could put you in a better financial position to continue paying your mortgage.
A Loan Modification Must Come through Your Current Lender
Because your current lender owns your mortgage, any modifications must be made through them, and they’ll need to approve the terms included. There are several kinds of modifications that your bank may consider.
An Extension of Your Loan Term
You can seek an extension of your loan term, which can put you in a better position to handle your monthly mortgage payments. This, however, increases the amount of overall interest you’ll ultimately pay on the property.
A Reduction in Your Interest Rate
You can seek a reduction in your interest rate, which can decrease your monthly payments, but it only applies if the current interest rates are lower than they were when you purchased your home. If you qualify for a refinance, however – such as if you’re current on your mortgage payments – it’s a better path forward because it also protects your credit rating.
A Modification of Your Loan Structure
You can seek a modification of your mortgage’s loan structure. An example is changing it from an adjustable interest structure to a loan with a fixed interest rate, which can be very helpful to those on fixed incomes.
A Principal Forbearance
You can seek a forbearance on the principal you owe. In some rare instances, banks are willing to set some of the principal balance aside – to be paid back later. While this can reduce your monthly payments, the bank is only likely to consider a principal forbearance if there is no other way for you to avoid foreclosure – and if they’re interested in helping you avoid foreclosure.
It’s Time to Consult with an Experienced South Carolina Loan Modification Attorney
If you’re having difficulty covering your mortgage, a loan modification may be a possibility, and the savvy loan modification attorneys at Reed Law Firm – proudly serving South Carolina – have the experience, keen legal insight, and resources to help. Learn more by contacting us online or calling 843-418-9004 today.
