What Exactly Is A Mortgage Modification?

With all the options out there to lower your bills, you might be wondering which one is best for you. You can take matters into your own hands by calling your lenders and asking for lower rates, alternative repayment plans, or to have a certain part of your debt forgiven. This course of action can yield results, but they are usually not significantly beneficial to your overall monthly budget. You might also consider filing for bankruptcy, which will reduce or eliminate your debts, and this approach works well for a large number of consumers. But if you are not sure bankruptcy is the right step to take, or you are only looking to lower your house payment, you can think about asking for a modification of your mortgage. Before you do though, take a look at a few of the requirements and some basic information about mortgage modifications.

A mortgage modification is a process whereby your current lender rewrites the terms of your mortgage. This is beneficial because it can result in the following:

•         A lower interest rate.

•         A lower payment, because when the rate is lower the payment is also decreased.

•         More money in your pocket every month because you are now paying less for your house.

•         Reduced stress levels in your home, because as we all know when money is tight or there is not enough to go around, your anxiety and stress increases.

There is a process that has to be followed in order to get these benefits, and we can help. Typically, you have to start by filling out an application for a modification and providing certain documents to your lender. The most commonly requested documents include proof of income, proof of homeowner’s insurance, and proof of steady employment. This can be quite a bit of paper to gather, but the upside is that most times you do not have to have your home appraised again like you did when you made the initial purchase. This not only saves on time, but also on expenses. Once your application is approved, there will be a new closing, just like when you bought your house, and you will be required to sign a new note and mortgage. The new note and mortgage become effective, and the old ones no longer govern your payment obligation.

For more information about debt and what to do if you have more debts than you can pay, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you today.