CONNECTICUT MORTGAGE LOAN MODIFICATIONS
A loan modification is a change to the original terms of your Connecticut mortgage loan. Unlike a refinance, a loan modification doesn’t pay off your current mortgage and replace it with a new one. Instead, it directly changes the conditions of your loan. You can only get a loan modification through your current lender because they must consent to the terms. Some of the things you might want to adjust include:
Loan term changes: If you’re having trouble making your monthly payments, you and your lender can modify your loan and extend your term. This gives you more time to repay your loan and reduces the amount you must pay every month.
Interest rate reduction: If interest rates are lower now than when you locked into your mortgage loan, you may be able to modify your loan and get a lower rate. This lowers your monthly payment without changing your term.
Loan structure changes: You may be able to modify your loan from an adjustable interest structure to a fixed rate. This can be beneficial if you now live on a fixed income and you need a more predictable monthly payment.
Principal reduction: Your lender may agree to reduce the amount you owe on your loan. However, these modifications are rare. You can usually only get a principal reduction if no other possible solution will help you avoid foreclosure. You usually also have to subscribe to a repayment plan to qualify for a principal reduction. A repayment plan allows your lender to see if you can stay on top of your new payments. Your lender may agree to settle some of your principal after you complete the repayment plan trial period.
Lenders have no obligation to accept your request for a modification or negotiate your principal. This means that getting a modification is usually more difficult than refinancing. However, if your lender believes that you won’t be able to pay off your loan in the long term without a modification, they’re more likely to accommodate you. Every lender has their own standards when it comes to who qualifies for a modification and what types of modifications they offer.
You may receive offers from settlement companies to help you get a loan modification if you’re behind on your mortgage. BEWARE. These companies claim to negotiate with your lender on your behalf. However, they are typically not licensed Connecticut Attorneys and carry hefty fees. The last thing you need is a high-fee contract with a settlement company if you’re already behind on your mortgage payments. Let an experienced licensed Connecticut Real Estate Attorney help you!