What is meant by Loan Modification?
Date: Wed, 04/06/2011 - 03:17
People who are behind or bogged down by their mortgage payments
People who are behind or bogged down by their mortgage payments can apply for a modification of the terms. If you are current on your payments, if would have no affect on your score.
What is the term for modification? Is it like settlement where t
What is the term for modification? Is it like settlement where the creditor will lower the amount?
When you're delinquent on your mortgage payments, you can apply
When you're delinquent on your mortgage payments, you can apply for a loan modification with your lender. In this process, if you meet the required criteria, the lender will reduce the interest rate for the loan payments so that it becomes easier for you to pay off the mortgage. However, as your loan term will be reduced, the term period to pay off the loan will get increased. In some cases, the lender will even reduce the principal balance to a certain extent.
In most cases, the borrowers apply for a loan modification when are already in default. Thus, in such situations, the loan modification will affect the credit score and lower it to some extent.
