Phoenix Loan Modification Attorney
Learn more about loan modification in Phoenix, AZ, and the Greater Valley Area. Call a lawyer at (602) 466-9631 to learn more today.
Affordable Debt Relief in Phoenix
A loan modification is a change in the terms of your original mortgage. It does not pay off your current mortgage and replace it with a new one like a refinance – it directly changes the conditions of your existing loan. If you are facing financial hardship and having trouble making your mortgage payments, loan modification may be the solution for you.
How Does Loan Modification Work?
The only way to get a loan modification is through your current lender. They hold the mortgage on your property and must approve the terms. The types of changes you may be able to make in a loan modification include:
- Extending the loan term: If you are struggling to make your mortgage payments, extending the term of the loan could lower the amount you pay every month. The drawback is that you will pay more on your mortgage in the long run.
- Lowering the interest rate: Interests rates can fluctuate. If rates are lower now than they were when you first took out your mortgage, a loan modification could reduce your monthly payments and save you money.
- Adding missed payments to the end of the loan term: If you are behind, this could help you catch up.
- Restructuring the loan: If you are living on a fixed income, you need your monthly mortgage payments to be predictable. It may be possible to modify your loan from an adjustable rate mortgage (ARM) with interest rates that change periodically, to a fixed rate loan.
How Do You Obtain a Loan Modification?
Mortgage lenders are under no obligation to accept requests for modification. Generally, it is more difficult to get a loan modification than it is to refinance. Lenders each have their own standards for what is required, and so do investors, such as Fannie Mae and FHA. To qualify for a modification, you will need to show evidence of hardship.
Loan Modification vs. Bankruptcy – Which Is Better?
Your home is your family’s most important possession – and probably your biggest investment. In times of financial hardship, it can become increasingly difficult to make your monthly mortgage payments. If you get too far behind, your lender could foreclose on your home. In this situation, debt relief may be obtained either with a loan modification or by filing Chapter 13 bankruptcy. If approved by your lender, a loan modification can stop foreclosure. The drawback is that homeowners may have to wait to find out if their applications for modification were approved.
To ensure a foreclosure sale is stopped, another option is to file Chapter 13 bankruptcy. This stops foreclosure immediately and creates a payment plan that allows for regular monthly mortgage payments plus an additional amount toward the past due balance. It can also reduce or eliminate other debts such as medical bills, credit card bills, and other unsecured debt. Once your Chapter 13 repayment plan is complete, you can begin making regular monthly mortgage payments to your lender and your loan will be in good standing. You can even apply for loan modification to further reduce your payments once you start your repayment plan.
How Can a Phoenix Bankruptcy Lawyer Help?
Our experienced Phoenix bankruptcy attorneys at Hilltop Law Firm can assist you with both loan modification and Chapter 13 bankruptcy. After a free consultation, we can recommend the best debt relief solution for you. Our firm takes pride in offering top-notch legal services at affordable rates. We also offer easy payment plans with no money down bankruptcy options.
A home is not something your family can do without. If you need skilled legal help keeping your home safe, contact us at (602) 466-9631.