Life circumstances often change, and sometimes that change means that our financial situation changes. Refinancing is a good option, but not everyone can qualify. Unforeseen circumstances like a loss of income, natural disaster, or divorce can put homeowners in a tight spot -- facing foreclosure.
When this happens, mortgage modification can be a good solution to avoid damaging activity to credit scores and preserve homeownership.
What is a Mortgage Modification?
A mortgage modification is an agreement with your existing lender to alter the terms of your existing mortgage. Modifications include changes in payment amounts, due dates, length of the loan, and interest rate. A mortgage modification is a good option for those facing severe or extended hardships and who do not qualify for traditional refinancing.Benefits of Mortgage Modification:
- Resolves delinquencies
- Less damaging than a foreclosure
- Gives a fresh start, possible lower payments
- Allows borrowers to stay in the home