Loan Modification Pro and Con

Loan Modification

If you can make payments on your loan, but don't have enough money to bring your account current, your lender may be able to change the terms of your original loan to absorb your delinquent payments and make the payments more affordable. Your loan could be permanently changed by adding the missed payments to the back end of the existing loan balance, lowering the interest rate or making an adjustable rate fixed, or extending the number of years you have to repay your loan.

PRO: You remain in your home.

CON: Because of additional debt such as credit cards, car payments, medical bills, and student loans, most people do not qualify for a loan modification. If you purchased your home with little or no money down or your home has depreciated in value at a rate at or near the national average, you may not quality.