Welcome!




Expand Your Education with These Courses from
Time Management: Skills for Sales Success: Part Two.
The Psychology of Consultative Selling: Skills for Sales Success: Part Four.
Effective Presentation Skills for Sales Professionals: Skills for Sales Success: Part Five.
Negotiating Skills: Skills for Sales Success: Part Six.
BPOs: The Agent's Role in the Valuation Process.

Real Estate Q&A: Loan Modification Based on What You Still Owe

Have a comment on this article? Share on Facebook!

By Gary M. Singer

(MCT)—QUESTION: I paid my 15-year mortgage for eight years before I suffered a hardship and had to stop making payments. I am trying to get a loan modification and want to know what happens to the equity in my home. And is the modification done on the original loan amount or just the remaining balance of the loan? —Valeria

ANSWER: When your lender looks to modify your loan, it considers your budget to get a payment that is affordable for you to make. Lenders estimate that a person can devote 31 percent of their household income toward principal, interest, taxes and insurance. You do keep your equity. The loan modification amount will be based on what you still owe on the loan, plus the accrued interest and penalties for the time you did not pay.

To get the payment to an affordable amount, your bank will first look to lower your interest rate and will adjust the remaining term of your loan only if it is necessary to spread the payments over a longer time. It’s easy to see what your payments would be if the loan mod is approved by applying the 31 percent formula to your income.

To maximize your chances of getting approved, make sure to cooperate fully with lender requests for documents, even if it means sending in the same form multiple times. Also remember that the bank representative on the other side of the phone is a real person whose job is to try to help you and the many others in similar situations. Even when you’re frustrated, be patient and respectful.

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar.

©2013 Sun Sentinel (Fort Lauderdale, Fla.)
Distributed by MCT Information Services

Want instant access to great articles like this for your blog or newsletter? Check out our 30-day FREE trial of REsource Licensed Real Estate Content Solutions. Need easy stay-in-touch e-Marketing solutions too? Try Pop-a-Note for 99 cents!
Join RISMedia on Twitter and Facebook to connect with us and share your thoughts on this and other topics.




Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Copyright© 2014 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com

Our Latest News >>