If you are unable to meet the terms of your mortgage repayments, you could be at the risk of foreclosure. However, you can get better terms on your agreement and still keep your home through loan modification. Loan modification allows you better payment terms, with lower monthly payments needed. Loan modification is a great idea, but applications need to be made well before foreclosure to ensure borrowers can keep their homes. Here are a few things you may need to know before taking up loan modification that could help you out.
You may not need loan modification
Loan modification can be a great way t reduce your payments, and could offer reduced interest rates. It will certainly help you keep your home if you can only make lower monthly payments than on your original loan agreement. Approval might not be as ideal for you, since these loan modification products may have balloon payments attached that will be difficult to pay. Loan modification will not offer the long term solutions homeowners who are facing foreclosure may need. Over time, loan modification will be costly and may be unsustainable for people without a steady source of financing for their loan.
Your three month trial plan may not be binding
If you are facing foreclosure, being approved for a three month trial plan may not necessarily guarantee that you will be approved for full loan modification. All this is legal too, which means that you could lose thousands in repayments, and your home. For this reason, you should only consider loan modification when you are financially stable and can continue to meet the repayment expectations on your existing property. This way, any rejection will have no consequence on your property.