"A change in the terms of a loan, usually the interest rate and/or term, in response to the borrower's inability to make the payments." From EdwardJones.com"A Loan Modification is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford."From HUD.gov
What can a Loan Modification do?
Changes to your loan may include any of the following:
*Lowering the mortgage interest rate
*Extending the years of the mortgage
*Setting a fixed mortgage interest rate (instead of an adjustable one)
*Adding arrearages (delinquent amounts due) onto the back end of the loan
*Reducing the principal balance
*Or a combination of several of the above
Each loan modification case varies. Each homeowner will have a unique set of circumstances.
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