| Since the housing bubble burst, the housing market has | | | | Banks can also extend the terms of the loan. The |
| been struck with a plague of foreclosures. These | | | | term of the loan is the amount of time that it takes to |
| foreclosures lower housing value, force people from | | | | pay the full amount of the loan back to the bank. |
| their homes, destroy credit and lives. There is help | | | | Common terms on a home loan are 15 years and 30 |
| available. Homeowners that are trying to hold onto their | | | | years. The longer the terms the less expensive the |
| homes can get relief. There are several loan | | | | monthly payments are, but the higher the total cost of |
| modification programs available. Understanding what | | | | the loan. Since the issue is regarding monthly |
| they are, how they work and different types of | | | | payments, many banks are adding a 40-year term to |
| programs available may provide struggling | | | | lower the monthly payment even more. Even though |
| homeowners hope. | | | | the total amount paid out is higher, it is easier to make |
| Loan modification programs are designed to | | | | the monthly payments. |
| renegotiate your primary home loan. They are intended | | | | Some lenders are even providing completely new and |
| for use when the borrower cannot sustain paying | | | | different home financing products. In some cases they |
| back the loan in the long-term. The lender and the | | | | are writing up new loans that place missed payments |
| borrower come to agreement on how to change the | | | | back into the principle of the loan. This is done to help |
| conditions of the loan that gives the borrower a better | | | | stop any foreclosure proceedings against the property. |
| chance to hold onto their home. There are several | | | | This allows for the borrower to have a fresh start, |
| used to modify the loan. | | | | after the loan modification is approved. |
| Adjusting interest rates is the first step that most | | | | Homeowners that are having trouble making ends |
| banks are pursuing. The federal government is also | | | | meet need to consider using a loan modification. |
| assisting to try to push the payment amount down to | | | | Contact the lender or bank in order to get more |
| 31% of the borrower's gross income. Any lender, who | | | | information about starting the loan review process. The |
| participated in the mortgage bailout, must lower interest | | | | application process can can be very complicated and |
| rates on troubled mortgages to 2% APR. This is the | | | | not everyone or every home qualifies. In order to find |
| first step taken to lower the payment amount. This | | | | out if a loan modification can help, contact the bank or |
| lowered interest rate potentially takes hundreds of | | | | other financial professionals. |
| dollars off the monthly payment. | | | | |