At the law office of Macco & Stern, LLP, we understand the frustration and anguish New York residents feel if they are facing a foreclosure. It can be worrisome if you are informed you might soon lose your home, and you are trying to do everything you can to ease your financial burden and keep your house.
If your home is soon to go into foreclosure or you filed for Chapter 13 bankruptcy, you might have received offers to apply for a home loan modification. As U.S. News & World Report explains, the purpose of a loan modification is to lower your monthly payments, which can help you catch up on or stay current with your mortgage payments. Lowering your monthly mortgage payment may also make it easier to pay the rest of your bills.
However, home loan modifications should be considered carefully. They are not the same as a mortgage refinance; a modification will often significantly raise your interest rate and can add thousands of dollars to the end of the loan that you are unaware of. It may also take months of paperwork and hassle for your modification application to go through. A refinance may be difficult to get, however. These are usually reserved for those with good credit who are current on their payments.
Despite the drawbacks, a loan modification might be a solution to keep your home when you are trying to improve your credit and address your debt problems. You should be wary that although there are legitimate lenders that offer modifications, others are scammers that target those facing foreclosure. As our page explains, the modification process may be complicated and frustrating, and obtaining experienced counsel may be wise.