Loan Modification Lawyer Texas
If you want to modify the terms of your mortgage loan, you may want to consult a Texas loan modification attorney. A mortgage modification can help you remain in your home. It is a change to the repayment terms on your current home loan that reduces your monthly payment.
Common Methods to Modify a Mortgage
The main goal of a mortgage loan modification is to avoid foreclosure. Mortgage lenders may use several methods to modify a mortgage, including:
- Extending repayment period. The longer you have to repay your mortgage loan, the lower your monthly payments will be. However, you should understand that stretching out your repayment period may increase the amount of interest you have to pay over time.
- Reduce the principal portion of the loan. In certain situations, the lender may be able to reduce the principal portion of your mortgage loan, which can give you a good amount of equity in your home.
- Lower interest rate. This is another common way to modify a mortgage. If your lender lowers your interest rate, your monthly payments may be significantly lower.
- Convert to a fixed interest rate. If you currently have an adjustable-rate mortgage, your lender may consider converting it to a fixed-interest rate to help you manage your payments better.
How to Qualify for a Loan Modification
If you want to see if you qualify for a loan modification, you may want to get in touch with a loan modification attorney, like one from Leinart Law Firm. An experienced Texas loan modification attorney can assess your situation and determine if you may qualify for a loan modification or not. Generally, you have to be at least one mortgage payment behind and show evidence that you have a major financial hardship, such as the death of a family member, long-term illness, or divorce.
How Loan Modification Can Impact Your Credit Rating
If you are considering a loan modification, you might wonder how it will affect your credit score. Since lenders often report your loan modification to the national credit bureaus, your credit rating may take a hit. However, it is important to recognize that the impact on your credit score will be less severe than a foreclosure. You will have the opportunity to rebuild your credit rating over time.
How Loan Modification Differs from Refinancing
Some people may use the terms loan modification and refinance interchangeably. However, they are different. Refinancing allows you to replace your current mortgage loan with one that has a lower interest rate or longer term and does not negatively impact your credit.
However, those who are experiencing financial hardship might not qualify for refinancing because of their low credit score or reduced income. In these situations, the homeowner may only qualify for a loan modification.
If you have additional questions about loan modification, you should schedule a meeting with a Texas loan modification attorney from Leinart Law Firm today to talk about your case in detail.
Common Misconceptions About Loan Modification
If you are having trouble paying your mortgage, you may want to consult a Texas loan modification lawyer. You may qualify for a loan modification, which can change one or more of the terms of your existing loan. Here are some common misconceptions about loan modification that you should not believe. Read about those, and then contact us at Leinart Law Firm for help today!
- I must be late on my mortgage payments to qualify for loan modification. Although you might have a more difficult time getting approved for loan modification when you’re not behind on payments, it is not impossible. You have to establish that you are experiencing severe financial hardship, whether it is due to a job loss or divorce.
- If I file for bankruptcy, the lender will not modify my loan. If you are deep in debt, you may be thinking about filing for bankruptcy. However, you may be worried that your lender will not modify your loan if you file. The good news is that declaring bankruptcy with a Texas loan modification lawyer will not necessarily prevent you from getting your loan modified. As long as you continue paying your agreed-upon payments, you may get your loan modification approved.
- If I have poor credit, I’m not eligible for a loan modification. Unfortunately, some homeowners are reluctant to apply for a loan modification because they do not have good credit. They assume that they will not get approved. Your credit score has no bearing on your loan modification. On the other hand, if you would apply for refinancing, you would have to have a credit check.
- I will get my principal reduced no matter what. Although you might be able to get your principal reduced, it is not a sure thing.
- If I can’t afford my mortgage, I should not apply for a loan modification. If you have little to no income, you may not be able to afford your mortgage. However, if your current income is close enough to being able to afford your monthly mortgage payment, it may be worth it to apply for a loan modification. You may be able to get a second job for the time-being to qualify for a loan modification.
If the bank rejected my loan modification application, that is it. If the bank denied your initial application, you might assume that you have to consider other options. However, you may be interested to know that the majority of initial loan modification applications are rejected. Just because your application got denied the first time around, does not mean that you have to give up. For instance, if your application was denied because your income is too low, you may be able to document income that you don’t report to the IRS, like rent you receive from family members. Even if it is just a little bit of extra money a month, it may help you get your application approved. A Texas loan modification lawyer can help you reply for the loan modification, so contact one today at Leinart Law Firm!