Through your mortgage, you are able to finance the purchase of your house and make it more affordable for you and your family. This loan comes from a bank or a mortgage lender and the house acts as collateral in exchange for the money you are borrowing. However, sometimes mortgages have to be modified in order to tend to specific financial situations such as bankruptcy in Chicago. Mortgage modification is an agreement between you and your bank or mortgage lender that changes the original terms of the mortgage, lowering the amount of money that is due each month. Facets that can be altered include payment amount, the length of the loan, your interest rate and more.
How to Know if Modification is an Option
Not everyone can benefit from mortgage modification. If you are ineligible to refinance your mortgage, modification may be an option for you. Long-term hardships such as bankruptcy in Chicago or an unexpected illness can throw off your mortgage-payment schedule. If you are already behind on your mortgage payments or you foresee yourself falling behind in the near future, it is best to talk to your lender about mortgage modification.
How Does Mortgage Modification Benefit You?
It is best to be transparent with your lender if you believe you will need a mortgage modification. This will ensure that you avoid or resolve any delinquency status with your lender. The change in your mortgage will be permanent, so it will give you a fresh start to make lower, on-time payments in the future. Plus, mortgage modification will take less of a toll on your credit score than a foreclosure would, and you get to stay in your home.
How Does It Work?
There are multiple approaches to modifying a mortgage. One way is to change the type of mortgage loan you have. For example, you can change from an Adjustable Rate Mortgage to a Fixed-Rate Mortgage. Another possible approach to mortgage modification is extending the terms, meaning you have more time to pay the mortgage. A 30-year term could switch to a 40-year term. Your interest rate may be reduced either temporarily or permanently as well.
Are you in need of a mortgage modification due to bankruptcy in Chicago or another unfortunate circumstance? The Law Office of Thomas W. Drexler has the necessary experience and dedication to help you. Contact us for a consultation today!