If you are looking into whether a mortgage or loan modification is right for you, you may be wondering how they work. If you are approved for one, a loan modification could possibly lower your mortgage payment. At the very least, it can help you become current on your mortgage. It also may help you avoid foreclosure.
A mortgage modification works by doing one or more of the following things:
- Rate reduction: when a mortgage company agrees to lower the interest rate of the mortgage to a new interest rate.
- Principal reduction: when the mortgage company agrees to lower the principal amount that is owed on the loan.
- Capitalization of arrears: when the mortgage company takes the amount that is needed for the account to be current and adds it on to the end of the loan. This allows the homeowner to be current without paying a large sum of money up front.
- Term extension: when the mortgage company agrees to extend the term (number of years) of the loan, so that the monthly mortgage payments are lowered.
The Mortgage Modification Center
If you are interested in learning more about whether a loan or mortgage modification may be right for you, please do not hesitate to reach out to the Mortgage Modification Center at (401) 467-7998. The Mortgage Modification Center, led by Attorney John S. Simonian, has helped numerous families with a mortgage or loan modification. Attorney Simonian may be able to help you. Please contact the Mortgage Modification Center for your free initial consultation.