One of the greatest expenses that a person can deal with through a mortgage loan is that of the expenses dealing with late charges
. These are charges that can be very expensive and can add to the amount of money that one owes. The biggest problem about these late charges is that they are ones that a person might not have been able to avoid due to some kind of a financial hardship. A loan modification will work with late charges in a unique way to ensure that a loan can be paid off.
In a loan modification the late charges that were added to one's mortgage loan will not have to be added back to the loan after it has been modified. This is something that is done under the recommendation of the Department of Housing and Urban Development. HUD states that all late charges should be removed if a loan is going to be modified.
The reduction in the late charges involved in the loan will end up allowing a person to save a good amount of money on the cost of a mortgage loan. This is thanks to how the loan will work with fewer debts involved. The new loan can end up being cheaper and therefore it will be easier to get principal amounts paid off. There is also a greater likelihood that interest charges will end up being reduced because of the reduced amount of money owed in the modification.
A creditor is also willing to go ahead with this part of a modification. The reason for this comes from how a creditor will not try to pursue late charges as much as it can costs for the principal and interest on a loan. This is due to how the late charges on a loan will end up being optional charges. This means that these are charges that were not necessarily expected from a person and are only being imposed as a means of informing a person to pay one's mortgage loan off in a responsible manner.
The best part of this portion of a loan modification is that a person who enters a modification can use one's financial hardship to ensure that these charges can be dropped. These late charges are often not the fault of the person who has the mortgage loan. They are often caused by how a mortgage loan has become too difficult for a person to pay off. A person who cannot get a mortgage loan handled in a proper amount of time is going to end up dealing with late fees even if the lateness of the payments was not that person's fault.
The addition of late charges on a loan will end up being rather unfair to the person who is getting the loan. However, a loan modification will be used to ensure that the late charges can be removed, thus ensuring that the person who is going to work with a loan modification can actually pay it off in a reasonable amount of time.