When you talk to a financial advisor about your mortgage, the phrase "loan modification" may enter the conversation. If you haven't heard this phrase before, you may have questions about what the process entails and who benefits from the process. Learn more about what a loan modification lawyer can do for you.  

What is a loan modification?

A loan modification adjusts the terms of your mortgage in the case of financial hardship. The modifications include loan term changes, interest rate reduction, and principal forbearance.

What's the difference between a loan modification and refinancing?

There are numerous differences between loan modification and refinancing. First, loan modifications change the terms of the existing loan instead of paying off the current loan and replacing it with a new one. Next, loan modifications allow you to adjust your principle, while refinancing does not. 

Additionally, loan modifications and refinancing have different requirements. You can get a loan modification if you aren't up to date on your bills. You won't be able to refinance in that case. You won't be able to refinance if you owe more than your house appraisees for, either, but you can get a loan modification. Finally, loan modifications require more proof, including proof of hardship, proof of income, bank statements, and tax returns. 

Who Should Get a Loan Modification?

Ideal candidates for a loan modification include homeowners who have fallen behind on their mortgage or people who owe more than their house is worth, especially if behind due to financial hardship. Proof of hardship includes job termination or medical bills. Homeowners who are up to date on mortgage payments but want to take out money against their house should consider refinancing.

Why Would You Need a Loan Modification Lawyer? 

A loan modification lawyer can analyze your legal situation to determine your options. Ideally, you want to reach out for loan modification services as soon as you fall behind on your bills. If you wait too long, you may end up going into foreclosure. A lawyer will help you complete the loan modification process as soon as possible and answer questions directly related to your situation. 

When you fall behind on your mortgage, don't panic. Lenders understand that financial struggles happen. There are programs available to you, such as getting a loan modification. You may be able to save your house and get yourself back on track if you get approved, so talk to someone today.

Contact a local loan modification lawyer to learn more.