How Does A Loan Modification Program Work In NH?

If you are at risk of foreclosure the idea of a loan modification may hold a lot of appeal; but getting your lender to say yes is much harder than you might imagine, and the trade-offs to applying for a loan modification can be big.

What is a loan modification?

It is a change made to the original terms of the loan including:

• Lowering the interest rate
• Extending the length of the loan term
• Lowering the loan principal (very uncommon)

Some loan modifications are a debt settlement which WILL affect your credit. There are federal programs, which will not affect your credit, but they have very strict guidelines the lender must follow, and are therefore very difficult to qualify for. We have heard horror stories of homeowners working faithfully to get a loan modification only to be denied a week or two before their foreclosure sale date.

If you do get approved for a loan modification, be sure to look it over carefully as it may not be the good news you were hoping it would be. Often these modifications start with great terms that seem appealing, but then have a built-in balloon payment that is due for an enormous amount – sometimes within a year there can be a $10,000 payment due! That is certainly not a long term solution but is only delaying the inevitable.

The other option we often see is extending the life of the loan to 55-60 years. The payments may have been reduced, but you will be paying on your mortgage forever, and that is certainly not a good option if you ever plan to retire.
Even if you are able to scrape together just enough every month to make your mortgage payment, that doesn’t mean that is the best option for you to take. What happens if an emergency arises? A repair comes up that needs to be made? What about retirement savings or maybe you just want to be able to go on a vacation?

The better option may be to free yourself of that debt, even if it means moving to a different home. The reality is if you can’t afford your mortgage payment now, you will likely not be able to afford a loan modification either. You may not be avoiding foreclosure at all, but just delaying it, and then you are left with nothing.

NH Home Buyers, LLC is here to help you find a solution that best fits your difficult situation. Jeremy and Michelle are expert problem solvers who can point you in the right direction; whether it is selling your house to us or pursuing a loan modification. We can give you a fair cash offer that does not include any fees or obligations, and we can close in as little as a 7 days.

No obligation – just a conversation!

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