There are many different terms for a loan modification. It can be called a loan modification or mortgage modification, restructuring, and/or a workout plan. This is when a borrower who is having trouble making their mortgage payments works with lenders to modify the terms of their mortgage loan.
Investors who see your interest rate rising or are behind on their mortgage payments are not alone. Although it may seem tempting to hide your situation from banks, it is not the best thing. If you explain your situation to banks, they will be more than willing to work with you. They may modify your home improvement loan, delay your payments or offer other assistance to help you keep your investment.
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This article will assist real estate investors in understanding the steps involved in loan modification.
Which Type of Loan Should be Modified?
You should negotiate with your bank to modify your loan if the interest rate on your loan is increasing every month, every 6months, or every year. Banks will often lower interest rates to between 2% and 3% for as little as three years or longer depending on the length of the loan.
Homeowners vs. Investors
This article is intended to provide information for real-estate investors. They will focus on a lot of the difficulties investors will face when negotiating a loan modification with banks that mainly focus on federal programs and assists homeowners, rather than investors.
You can also browse online resources for more information about property loans.