When a New York resident decides to buy real property, they generally will have to secure a mortgage or a loan to purchase the real estate. After paying some amount of the purchase price as a down payment, the buyer will finance the rest of the purchase cost through borrowing money from a mortgage lender. Maintaining one’s active and timely payments on their mortgage is a good way to avoid legal and financial troubles regarding their property.
However, in some instances New Yorkers may find it difficult to maintain their mortgages. Whether due to job loss or other reductions in income, they may struggle just to scrape by and keep a roof over their heads. In these types of situations, mortgage modifications may be possible.
What is a mortgage modification?
A mortgage modification involves changing one or more of the terms included in an active mortgage. Generally, mortgage borrowers and mortgage lenders use mortgage modifications to help borrowers avoid foreclosure and to prevent financial losses for lenders. Mortgage modifications can involve changing interest rates, extending repayment periods, and even adding missed payments back into the balance of the existing loan.
How does a borrower get a mortgage modification?
Securing a mortgage modification involves working with a borrower’s lender to find terms that are acceptable to both parties. Modifying a mortgage is a legal contract and will bind the parties to the new terms. Before a borrower agrees to modification terms, they should fully understand what is changing in their existing mortgage and what the new terms will to alter their responsibilities.
When considering mortgage modification, a borrower can benefit from speaking with a real estate lawyer about their questions, concerns, and needs. Although no outcomes can be guaranteed under the law, real estate attorneys can advise their clients of what options and terms might best suit their mortgage situations. This post does not provide any legal advice and individual consultation with real estate attorneys is advisable for those who wish to learn more about mortgage modifications.