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Make Your Mortgage Affordable

“A loan modification is a restructuring of a loan. It can include changes such as a reduction in the interest rate and/or principal amount,” Glass explains. “Other changes that may be made in a modification include extending the period of the loan (from 30 years to 40 years), moving any delinquency to the back end of the loan, or converting it from an exotic type loan (interest-only) to a conservative one (30-year fixed).”

There are caveats: If you are put on a trial payment plan, whereby you make a reduced mortgage payment, it will adversely affect your credit until the modification is officially approved. Also, if the modification isn’t approved, all arrears on the mortgage will be due immediately and the foreclosure process will proceed. Your eligibility for a home loan modification depends on your specific circumstance, says Glass.

Applying for a loan modification or restructuring can be extremely stressful, says Stephfan Nurse, CEO of Tampa, Florida-based Consumer Education (  “This process can be rife with mistakes and bureaucratic snafus. But if you take steps to reduce the opportunities for errors, you’ll have a much better chance of being approved,” says Nurse.

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