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When facing financial difficulties, homeowners often consider two main options: loan modification and refinancing. While they both aim to reduce monthly payments, they function differently and have distinct impacts on your mortgage. Understanding the difference can help you make an informed decision based on your circumstances. Loan modification explained A loan modification is a change to the original terms of your existing mortgage. It involves negotiating directly with your lender to adjust your loan’s interest rate, payment structure, or term. The goal is to make

Loan modifications can be tricky, especially when figuring out what might stop you from qualifying. A loan modification can be crucial for homeowners who are facing tough financial times and can’t meet their mortgage payment obligations.  What is a loan modification? A loan modification is a change made to the terms of an existing mortgage to make the loan more affordable for the borrower. It’s designed to help struggling borrowers avoid foreclosure by making the payment more affordable. The primary disqualifiers: There are a few

A home loan modification can have lasting effects on your credit score in Maryland. Your credit score influences various aspects of your financial profile and future borrowing opportunities. Initial credit score impact Applying for a home loan modification may cause a slight dip in your credit score. This is because lenders typically conduct a hard inquiry into your credit history when evaluating your request. However, this impact is usually temporary and can be improved with responsible credit management. Payment history and credit usage Once you

COVID-19, also known as the coronavirus, has created an economic disruption unseen since the Great Depression.  There are many people who are unemployed who, through no fault of their own, have fallen behind on their mortgage payments.  There are several ways to catch up on missed mortgage payments.  One way is to make the payments.  Another way is to seek a forbearance agreement from the bank which will permit a short period of time to catch up on the missed payments.  However, depending on your

Sometimes the best loan modifications are scary for our clients. In particular, a loan modification with a balloon payment at the end of the loan is a great result for a borrower who cannot afford to pay a mortgage payment on the full balance of the loan even if the interest rate is reduced. While the lender may be reluctant to reduce the loan balance, although this is also a possible outcome; the lender may be willing to “balloon” out a portion of the balance

When seeking a loan modification for our clients, we aggressively pursue the best possible result by efforts to guide the lender to a favorable outcome based on the facts. This requires extra work by phone calls and letter writing, but the results are worth it.  We recently obtained an “in-house” loan modification for a client that was not qualified to receive a HAMP loan modification that included a large deferral of principal that will be forgiven over three years if the borrower successfully makes the