Brian Pendergraft is a mortgage loan modification attorney that assists homeowners in both Maryland & The District of Columbia in negotiating affordable monthly payments. We decided to turn our frequently asked questions into a resource for homeowners seeking to learn more about the process. If you have a question that you believe should be added to this FAQ, please let us know!
1. What Does a Moan Loan Modification Do?
The purpose of a successful loan modification is to lower payments to an amount that a homeowner can afford.
2. What Are Examples of How Terms Can Be Modified?
Loan modifications can be modified in a number of ways. Here are a few:
- A principal reduction lowers the amount of the principal to allow a homeowner to pay less than they originally borrowed. This lowers the monthly payment.
- An interest rate reduction can result in lower monthly payments.
- A term extension extends the term of the mortgage which may result in more money being paid over the life of the loan, but it lowers monthly payments.
- A conversion from an adjustable-rate to a fixed-rate mortgage can lower payments.
3. Who Qualifies For A Loan Modification?
All homeowners who are struggling to make payments should review their options. However, people are most likely to qualify if:
- They are experiencing a financial hardship.
- Their mortgage has a high-interest rate or if they have an adjustable rate mortgage.
- The amount remaining on the mortgage is more than what the property is worth.
4. What Are The Benefits of A Loan Modification?
- More affordable home payments.
- Avoiding foreclosure.
5. What Are The Drawbacks of Getting A Loan Modification? – Loan Modification Attorney
- Credit may be negatively affected. However, it’s a lot better than foreclosure.
6. Why Do Lenders Agree To Do Mortgage Loan Modifications If They’ll Make Less Money?
It seems counterintuitive that lenders would agree to accept less money or slower payments, but the foreclosure process is often more expensive to lenders in the long run than modifying loan terms and continuing to receive payments.
7. How Much Money Can A Loan Modification Save You?
The results vary for each modification. But here is in an example. Let’s say that Sally the homeowner’s mortgage payment is reduced by $450 per month for the next 30 years. That’s savings of $162,000.
8. How Long Does a Loan Modification Take?
The loan modification process typically takes six to nine months. However, it can be shorter or even longer depending on the nature of a specific situation.
9. What Are Alternatives To Mortgage Loan Modifications?
If a homeowner does not qualify for a mortgage loan modification or would rather move out of the home altogether they can consider alternatives such as a deed-in-lieu of foreclosure or a short sale. However, it’s important to have an attorney negotiate the full discharge of the debt if you consider the alternatives.
10. How Can A Loan Modification Attorney Help You?
A loan modification attorney can help you by processing your paperwork efficiently and negotiating affordable payment terms with your lender on your behalf. Do not hesitate to contact The Pendergraft Firm if you need help.
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