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Is A Mortgage Loan Modification The Right Choice For You?

On Behalf of | Jun 6, 2023 | Bankruptcy

If you’ve been finding it difficult to make ends meet, you’re not alone. One of the options you might have looked into is a mortgage loan modification. It may be just what you need in order to take control of your finances, get yourself back on track and ultimately – keep your home. 

Before you make a decision, however, you should assess the pros and cons of a loan modification before choosing whether it’s the right option for you. 

Lower mortgage payments 

This is often the biggest selling point for homeowners considering a mortgage loan modification.

Reducing the amount you pay each month for your mortgage gives you a bit of breathing space and can also allow you to use the money you save to pay off other debt. The disadvantage of this is that it will take you longer to pay off your loan as a result. 

Reducing your interest rates 

As part of your modified loan agreement, your lender may agree to reduce the amount of interest you pay. This is particularly useful when combined with lower mortgage payments. 

When you’re paying your mortgage back over a longer period of time, having reduced interest rates means you’re not paying significantly more interest as a result. 

If you don’t negotiate your interest rate, or your lender won’t agree to reducing it, you could find yourself paying a lot more in interest than if you hadn’t modified your loan agreement in the first place. 

Making the financial decision to apply for a loan modification can be a difficult and emotional one. Having the assistance of a legal professional who understands the process can help make things as simple as possible.