Many homeowners have been able to take advantage of the loan modifications that some of the lenders are doing on mortgages that either are in trouble or may soon be.
We at Hometown Realty here in Hutchinson, MN have clients who have been able to work out modifications with their lenders to lower their monthly payments by hundreds of dollars and now are able to stay in their homes.
Some of the modifications have required the homeowner to come up with some cash at the time of the modification, some of the loans have been extended to 35 and 40 years, while others have simply lowered interest rates to allow for lower monthly payments.
That’s all the good, now for the bad. These loan modifications will affect the homeowner’s credit scores negatively. This isn’t always explained clearly to the homeowners who become surprised down the road when they learn that their credit scores have dropped considerably.
So, if you are considering doing a loan modification, be sure you know all the ramifications before you proceed.