A house is one of or life’s biggest expenses and paying for that house with a particular amount every month and for the next 30 or so years can be financially draining. There may even be times – especially during economic recessions – when that monthly amount may even be too much for the homeowner. This can lead to payment defaults and the eventual foreclosure. In order to prevent such financial catastrophes, there are lenders and banks that offer services like loan or mortgage modifications. Such service is offered throughout the country, including in Long Island, New York.
What constitutes a Long Island loan modification and how is this beneficial to the homeowner? The mortgage modification is an option intended for homeowner who struggle to pay their monthly mortgage. It is a process wherein the mortgage’s terms are changed outside the original contract terms that were initially agreed upon by the borrower and the lender. Normally, one turns to a loan modification whenever the borrower is faced with the prospect of foreclosure. It is not always the case. If one is financially struggling, a mortgage modification can help in reducing monthly payments and lets the borrower still keep the home.
How is a Long Island loan modification beneficial? Mortgages are modified to the borrower’s benefit in several ways. The interest rate is reduced or the loan may be changed to a fixed rate instead of a floating rate. The principal amount of the loan may even be reduced and late penalties or other fees are reduced. The length of the loan term may be extended, which means lower monthly payments. Another benefit is capping monthly amortizations to a percentage of the income of the household. Another benefit of a Long Island loan modification is the principal forbearance program.
At the time the borrower is applying to modify the loan, the borrower may be current, in bankruptcy, in default, in foreclosure, or even late in complying with the monthly payments. To the homeowner, the process of modifying the loan can be both daunting and overwhelming. To make the application process easier and bearable, the homeowner would be wise to hire the services of a real estate lawyer when applying for a loan alteration. The truth is that representatives of banks promptly respond to a lawyer than they do a homeowner. Moreover, lawyers know more about the legal issues that may be used to help in the negotiations.
In order to make the process of a Long Island loan modification application easier, the lawyer will accomplish the application forms, gather the necessary documents, and send a complete package to the bank or the lender. After submitting the requirements, the lawyer will talk to the bank representative on the borrower’s behalf and follow up continually with the bank representative until a decision has been made.
There are a lot of legalities involved when it comes modifying mortgages; thus, the services of a qualified real estate attorney are essential. If a homeowner would seek to discuss legal issues concerning real estate or have his or her Long Island loan modification facilitated, the homeowner should set an appointment with the lawyer.
Keeping one’s home is very important and one move can mean the difference between losing one’s home to foreclosure and keeping it. The latter is always the batter option. In order to avoid financial pitfalls and lose one’s home, the loan modification is always a viable option. There are many other options. However, it is best for the homeowner to consult with the real estate lawyer and know what the available options are. All it takes is one call on the homeowner’s part.