Loan Modification: Make a Deal!

What terms can I expect from my modified loan?

No two loans or banks or borrowers are exactly alike so there is a huge variation in loan mods. On one end of the spectrum, the bank may only agree to bring the loan current and add the late payments onto the balance.

Best case scenario, the lender reduces your monthly payment to an amount you can afford. To accomplish that they may agree to reduce your interest rate, extend the length of time you have to payback the loan – and they can even agree to reduce the total amount you owe. Best case, they apply all of these strategies to your loan modification.

How do I know if I will qualify for a loan modification?

The number 1 criteria your lender is looking at is your ability to make the new modified payment now and in the future. You need to supply the lender with proof of your income, along with a complete and accurate financial statement detailing your income and expenses to show them that if granted the modification, you will be able to afford the new, lower payment.