Over the years, you might have trouble paying off your mortgage in New York. If you get too far behind, the lender might threaten to foreclose on your house. Fortunately, you could avoid this situation by requesting a mortgage modification.
What is a mortgage modification?
Under real estate law, qualifying homeowners can request a mortgage modification. Your lender might reduce your interest rate to make it easier for you to afford your monthly payments. If possible, your lender might also increase the length of your loan. You’ll still have to pay the full amount, but you’ll have smaller monthly payments.
You might have to meet a few eligibility requirements before you can request a mortgage modification. The lender still wants to see a return on its investment, so it might not give you a modification if it doesn’t think that the change will help you pay off your loan. Your real estate attorney might have to help you prove that you’re dealing with financial issues that make it difficult to pay your mortgage. Such concerns could include a divorce, a decrease in income, or a workplace injury.
Your lender probably won’t give you a modification if you have no problem making your current house payment. You might have to miss at least one or two payments before you can start talking about a modification. In drastic circumstances, your lender might decrease your original loan, but most lenders want to make back as much of their money as possible.
How do you apply for a loan modification?
An attorney could help you apply for a modification with your lender. You might have to submit extensive financial information to prove that you can’t make your current house payments. If the lender denies your application, you could file an appeal before a certain deadline. Keep in mind that your credit score might drop if your lender agrees to a modification.