You may have heard about home loan modification if you have a mortgage and struggle to make on-time payments. Loan modifications offer long-term relief for homeowners who cannot afford their mortgages. If your lender approves the plan, you may avoid foreclosure, receive a lower interest rate, and receive other benefits to ease your financial burden.
When should you consider a loan modification? Keep reading to learn more, and speak to our Illinois home loan modification attorney at Covert Marrero Covert LLP for more information.
Home Loan Modification Overview
A home loan modification involves changes to your mortgage so you can afford your payments more easily. Some changes in a loan modification include a lower interest rate or a different repayment schedule. However, most loan modifications do not lower your mortgage balance.
Your lender may let you modify your loan because foreclosures cost them more than modifications. So, the lender wants to avoid taking back the house because it is expensive for them. But they want you to continue making payments, so the lender may be willing to modify your loan.
When Should You Seek A Home Loan Modification?
Do you need help making your loan payments regularly? To put it another way, have you struggled to make payments for several months in a row because of a loss of income or increased expenses? Or, perhaps, you experienced a disability or divorce that affected your income. A modification may make sense in situations involving long-term problems meeting your loan obligations.
What About A Mortgage Refinance?
When the lender modifies your mortgage, it involves changing the terms to prevent a default. If the refinance will not accomplish these goals, it is not a viable way to reduce your monthly payment. As a result, most homeowners refinance to save money or take out cash.
What About Loan Forbearance?
Loan forbearance is a temporary pause of mortgage payments to help you through a short-term financial difficulty. During the COVID-19 pandemic, some homeowners put their mortgage payments on hold, but the payments must be made up.
Is A Loan Modification A Good Idea?
This option may be a good choice if you face long-term financial difficulties such as divorce, loss of income, or disability. If your loan provider approves the plan, a loan modification may offer long-term financial relief so you can keep up with your payments.
If you need help making payments, contact your lender to see if you qualify for a loan modification. If you think you will not have an increase in income soon, a loan modification may be the way to go. However, remember that some loan modifications may hurt your credit score unless the mortgage servicer reports it to credit bureaus as ‘paid as agreed.’
Contact An Illinois Home Loan Modification Attorney Today
Consider a home loan modification if you have difficulty making mortgage payments over a long period. The Illinois loan modification attorneys at Covert Marrero Covert LLP may be able to assist with your situation. Please contact our Illinois home loan modification attorneys today at 630-717-2783. Our attorneys serve the communities of Naperville, Warrenville, and Schaumburg.