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If you’re struggling to keep up with your mortgage payments, a loan modification may allow you to keep your home and put an end to the financial pressure. While renegotiating your mortgage has several benefits, there are potential drawbacks to consider before starting the process. Below are a few factors to discuss with your real estate attorney if you’re considering a loan modification.

What to Know About Loan Modification

The Advantages of Renegotiating Your Loan

In many cases, a loan modification can stop a foreclosure, allowing you to keep your home and get up-to-date on your payments. Lower interest rates, a reduction of the amount owed, or a longer-term will usually result in a lower monthly payment, which can fit your budget better. This process can alleviate future financial pressure and prevent the problems that put you behind on your mortgage in the first place.

The Disadvantages of Loan Modifications

While the benefits of a loan real estate attorneymodification are attractive, you should consider the impact on your long-term financial health before signing a new agreement. For instance, an extended-term adds years to the life of the loan, potentially resulting in thousands of dollars in additional payments over time.

Some loan modification programs are considered debt settlements and can harm your credit score. The negative remarks may stay on your report for several years, making it more challenging to qualify for other loans. If you do get an auto loan or new credit card, you’ll likely have higher interest rates, so you should speak to a real estate attorney who will review the agreement and explain the potential consequences.

 

Whether you’re falling behind on your mortgage or your lender has already started foreclosure, a real estate attorney can explain your options and help you choose the best path forward. Dennis P. Faller, Attorney at Law proudly serves homeowners throughout Auglaize County, OH, and offers detailed advice tailored to your unique situation. Visit their website to learn how they can represent your interests, get more legal tips on Twitter, or call (419) 738-4578 to speak with an experienced real estate attorney today.

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