I am a victim of corporate downsizing and poor planning on my own part. In spite of that, I was able to find a way to keep my home from going into foreclosure using a home loan modification program, and you can too! It wasn't that I was living above my means, but I just had not been able to save enough to tide me over when the layoff came. I was struggling just to keep the minimum paid on my credit cards, car note, and regular bills, and my house was close to foreclosure. Fortunately, I learned that to make the payments on my home, affordable modification of my loan was the answer.
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Here are some points to help you understand home modification loans:
- · What is a Loan Modification?
- · How is a Loan Modification Different From Refinancing, Short Sales, or Bankruptcies?
- · Are There Different Types of Loan Modifications?
What is a Mortgage Loan Modification?
It is a process where rather than getting a new loan, the existing loan is adjusted (or modified) by one, or a combination of, 3 ways. It can offer a reduction of the principle and interest, or extend the term of the mortgage, which reduces your monthly payment amount.
How is a Loan Modification Different From Refinancing, Short Sales, or Bankruptcies?
Refinancing is getting a new loan to pay off your current loan to allow you to remain in your home. Though it often results in lower payments, it is highly dependent on home equity, current market value, and other variables. Short sales hurt your credit (though not as badly as a foreclosure) and you lose your home. Bankruptcies damage your credit, and depending on the type of bankruptcy, you could lose your home.
Are There Different Types of Modification Assistance?
Yes, there are obama hamp (Home Affordable Modification Program) a government subsidized program, and also loan modifications through independent lenders. Credit-Yogi.com is a thorough site that you can refer to. This site offers free advice and consultations to inform you of your legal rights.
Loan modification is a solution that can help you save your home from foreclosure and prevent damage to your credit rating. It is important that you act quickly when you begin having problems staying current on your mortgage payments, but thanks to the easy process and helpful online tools, everything you need is available here.