Reason for Loan Modification

We all know loan modification. Many of us are also applying for the loan modification. But very few clearly understand why they are applying for loan modification. They only know a loan modification will make some changes in the loan terms (without the refinancing). There are some more benefits also from loan modification. In the new modified version of the loan, the loan terms are reshuffled to suit your current needs and financial obligations. Here I am trying to suggest some benefits of the loan modification.

1. This can be used to take interest rate down.
2. This can save you from making high payments.
3. You can move the ARM (Adjustable rate mortgage) to fixed rate
4. You can increase the loan term
5. This can make your principal balance less.
6. For getting help regarding the penalties for missed payment and late fees
7. To stop the home foreclosure.
8. This can be helpful during financial problem.
9. To make the insurance payment and property taxes as per current rule.
10. Free yourself from negative amortization loan.

In today’s bad economy every homeowner can ask their lender for loan modification to get some respite from the loan payment irrespective their situation (in fear of foreclosure or not). Many homeowners shy away from it in fear of bargaining with the lender. But they must not be afraid of the negotiation as the lenders always have to follow some guidelines during negotiation and they can’t deny your claim. This way you can save many dollars for your future needs also.