What Can a Loan Modification Agreement Do For You?

Can a loan modification agreement keep your home out of foreclosure? The answer is yes. A loan modification happens when a lender agrees to change the terms of you current loan making the payments affordable. Due to the nature of the times, most lender have put programs in place to help homeowners retain procession of their homes.

This loan modification is something that many lenders and finance companies are offering to help people that are near foreclosure or are having problems keeping up with the mortgage payments. As a result of the current economy, more people that ever before are being forced to look for ways to avoid losing their homes.

A federal loan modification allows the terms of your current mortgage are modified so that you can afford your house payments and stay in your home. If you were temporarily unemployed, the modification may include adding your missed payments to the end of your current loan.

A lowered interest rate is another form of loan modification. A few years ago, some of the practices in the mortgage industry were not completely ethical and if you fell victim to this you may have a higher than normal interest rate. In this case, the loan could be modified to include a lower interest rate and as a result a lower payment.

Another common form of loan modification is changing the type of loan you have. If you have a fixed rate loan, your loan modification company may allow you to modify your current loan to a fixed rate loan. You will most likely have lower payments and they will be the same amount each month and will not fluctuate with the prime rate.

The best place to begin the process of home loan modification is with your current lender. The federal government has also introduced a home loan modification program for homeowners that have lost their jobs or have had a steep payment increase.

If you have a loan that is guaranteed by Freddie Mac or Sallie Mae, you may be eligible to have you home refinanced at a lower interest rate. That is another option that the US government has made available to homeowners to try strength and put confidence back in the lending industry.

If you are in danger of losing your home, you do have foreclosure avoidance options. Don’t wait to being looking for a way to stop a foreclosure. A loan modification agreement can be a lifesaver, if you are facing foreclosure.