Homeowners who are facing the precarious situation of a likely foreclosure are often in a stat of panic and are willing to take any measure to save their homes. Inevitably, most of these people turn to refinancing, unfortunately if foreclosure is imminent it is obvious that mortgage payments have been missed or the homeowner is at least 90 days late. In both these situations a person would be ineligible for refinancing because these will reflect badly in your credit score and you need an almost flawless credit rating to procure refinancing.
It can be a heart wrenching experience to find that you have been denied of refinancing and that you may not be able to save your home. However what most homeowners fail to realize is that there is another solution besides refinancing: home loan modification.
Mortgage modification is essentially the renegotiation of the existing terms of your loan. Home loan modification is designed to help homeowners by making the monthly mortgage payments more affordable. Since the lending institution is already aware of your financial condition when granting you a mortgage modification, your credit score does not play a role in the process of procuring a home loan modification.
The lender and the borrower may renegotiate several terms under mortgage modification these may include:
o Reducing the interest rate and keeping it fixed for a period of one to three years or more.
o Writing off some of the principle amount or certain penalties that have been levied
o Extending the tenure of the loan.
o Or a combination of all of the above.
For homeowners who are faced with dire financial adversities home loan modification is a good option to save their homes. Not only will be able to retain your house through mortgage modification but you will also be able to profit from an eventual boom in the real estate market.
You can apply for a home loan modification on your own or you could avail the services of an attorney or a company that can negotiate the mortgage modification with the lender on your behalf.