Many homeowners are hearing about new mortgage modification options yet have no idea what a mortgage modification is. Here is the basics of what modifying a mortgage means. Use this information to help figure out and research if a mortgage modification can benefit you.

With so many homeowners looking to take advantage of the low interest rates available today, and so many more looking for a way to save money and prevent their home from being lost, mortgage modification is a hot topic. Simply put, a mortgage modification is when the terms, conditions, interest rates, length, or other factors of your current home loan are changed. This is different from refinancing because of the fact the loan remains the same, and a new one is not being taken out to pay the existing loan.

Especially these days, many mortgage modifications are needed, and approved, on the basis that the homeowner is unable to pay their mortgage at the current monthly amount it is at. Mortgage lenders and banks are not eager to approve homeowners for a home loan modification and often require the homeowner to be in some sort of financial hardship in order to get approved. If financial hardship is the reason for a mortgage modification, a letter stating your problems, solutions, and that will convince them that saving your home is truly a big deal for you.

When a homeowner finally gets a mortgage modification approval, many different things can change in their home loan. Since people are usually looking to get a lower monthly payment, the home loan is extended in length. Sometimes, lower interest rates, can actually be gotten through a mortgage modification. This is especially true for homeowners with decent credit, but who bought a home years ago when interest rates were nearly double what they are now. The end result more often than not though results in lower monthly payments for the homeowner. This comes at the expense of a longer home loan length, but can also get you better interest rates that can save you money in the long term. Also, never forget that there are costs associated with getting a mortgage modification that can easily add up to thousands of dollars that needs to be paid upfront.

While mortgage refinancing and modification seem like nearly identical practices, they are not. This information can help people who are looking into whether or not a mortgage modification is a good option for them. While all homeowners situations are different, the types of loans are all the same. However, some people will not be able to qualify for the type of loan or mortgage type they want, and need to know about their other options, and a mortgage modification is one of them.

-M Petrone

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