What to Do if You Can’t Afford Your Mortgage Payment
When you purchased your home, you in all likelihood had full confidence that you would be able to afford the monthly mortgage payment, or else you would not have signed the loan documents. So did the bank. Otherwise, you would not have passed the extensive mortgage application process. Unfortunately, life changes, and there is often little or nothing that you can do about it. Companies fire employees or cut their wages, accidents happen and people get sick. The economy improves and slumps, prices for food and gas go up, and all the while you still have to find a way to pay your monthly mortgage. To make matters worse, you may have purchased your home with an adjustable rate mortgage without fully understanding what you were getting into, and you may now have to pay a small fortune every month for your mortgage.
It may seem like your only solution to this desperate situation is to either give up your home through a deed in lieu or short sale, or to simply give up and allow the bank to foreclose on your home, but the fact is that you may have another option that would allow you to keep the house. By taking action now and contacting us at The Law Offices of Justin McMurray, P.A., you may be able to obtain a loan modification which would reduce your mortgage payment to a level that you can afford. Loan modifications generally work by extending the term of the loan or by reducing the interest rate or even the remaining principal. An Ocala foreclosure defense attorney from our firm can meet with you for a free consultation to review your situation to determine whether this is a viable course of action for you.
Differences Between Loan Modification and Refinancing
Mortgage modifications are different from refinancing, though they both generally have the same goal of reducing the borrower’s monthly payment. Refinancing involves essentially obtaining a new loan, and it is normally sought by homeowners whose credit score has improved or who want to take advantage of better interest rates. It also typically requires that the borrower pay closing costs, which can range into the tens of thousands of dollars. Loan modification, in comparison, is generally for homeowners with distressed mortgages and it is essentially a type of debt forgiveness which makes it possible to avoid foreclosure. Success in obtaining a loan modification generally depends on proving that you are suffering from some type of financial hardship. Fill out our free case evaluation form now so that we can begin working on a strategy for you.