Who needs a Loan Modification?

If you are having difficulties making your required loan or mortgage payments each month, then you may benefit from a modification to your loan. A loan modification is a change to original agreement on the loan between you and your bank. There are several different ways to modify your loan, including reducing monthly payments by allowing you to pay off the loan over a longer period of time, or skipping a month or two and still being considered current on your payments, or reduced interest rates which will lower your monthly payment. If you are struggling to make a payment each month, you should contact a Miami foreclosure attorney who can advise you if Florida loan modification may benefit you. There are many different situations that may warrant a loan modification. Here are a few examples of when should consider loan modification.

  • You and your family are “upside down” on your home mortgage. The crash of the housing market means that many people have mortgages that are two or three times larger than what their home is now worth. Loan modification might be able to lower the amount you owe on your home, allowing you to pay less each month or pay off your home in a shorter period of time.
  • The home you live in is facing foreclosure in Miami. If you file for bankruptcy, the bank will only get a portion of the money they loaned to you back. And they will not receive the interest you would have paid them over the 15 or 30 year life of your loan. Banks want to see a return on the money they lend. This puts you in a position of power to negotiate with them and try to lower your monthly payments to an affordable rate.
  • You have filed for bankruptcy or are considering doing so. Just like in foreclosure, if you file for bankruptcy your creditors will most likely lose money. That makes them want to work with you to find a solution that benefits both parties. Do not try to file bankruptcy to push your creditors to work with you. It rarely works, and you may not be able to back out of bankruptcy.
  • You were laid off and are now in a different career, but making a much lower salary. If you have changed careers and taken a pay cut, loan modifications might help you keep your good credit score by lowering your monthly payments to a rate that you can afford.
  • You are experiencing financial stress due to large medical bills or other unexpected expenses. Perhaps you were careful, you bought a home within your means and saved up money “just in case” but it just is not enough to help you pay all your bills. Contact your lender to see if they can help ease your stress.

Not everyone will be eligible for a loan modification. While it makes financial sense for banks to do as much as they can to help you afford your payment, it is not always the case. Contact your lender or a foreclosure attorney to find out if you are eligible.