Need to Stop Foreclosure? - Use Loan ModificationAuthor: Hector Milla
Loan modification is becoming an increasingly viable option for people facing foreclosure with little no other recourse.
Several different types of loan modification programs exist, and understanding the differences between them will help you to make the best decision as to which option is right for you.
Natalia Osorio Editor of the "Stop Foreclosure Loans" website -- http://www.StopForeclosureLoans.org -- pointed out;
“…If you need to stop foreclosure, use loan modification programs like one of those listed below and you can wind up saving yourself a load of money and heartache…”
Straight Capitalization Loan Modification--Here the interest that is delinquent is added to your principal, creating a new loan balance that is then amortized according to the same loan terms and conditions of your current mortgage. The monthly payments with such programs are higher than the original monthly payments and therefore this program is only available to people who can prove that their incomes will allow them to afford this higher payment.
Loan Modification with a Term Extension--This is the same as a Straight Capitalization Loan Modification except that the loan term (the length of time you have to pay off the loan) is extended, allowing for smaller payments. Under this program, however, the loan term can only be extended back to the length of its original term (i.e. 30 years), but no more.
Step Rate Loan Modification--With this program, the modified principal is determined the same way as in the previous two programs, only instead of adjusting the loan term for smaller payments, the interest rate is adjusted instead. A Step Rate Plan is determined with a length of 1-3 years, with the interest rate immediately dropping by 1% for each year in the determined plan (with a maximum, then, of a 3% drop). The interest then rises each year after the first year expires until it returns to its original rate. This program provides a temporarily under-employed homeowner a temporarily reduced monthly payment.
Reduced Rate Loan Modification--A last resort for people ineligible for any of the other programs, with a Reduced Rate Loan Modification the interest rate is dropped permanently. When a homeowner faces this option, it often comes to evaluate alternatives (like a short sale) that may end up being more advantageous for them in the long run.
“…One final option to stop foreclosure, and use loan modification to remain in your home is to arrange for a combination of the above-mentioned programs…” N. Osorio added.
Further information about how to get professional assistance with a mortgage loan modification by http://www.StopForeclosureLoans.orgAbout the Author:
Hector Milla runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.
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