With homes being foreclosed on every day, and the economy in the midst of a deep recession, many people are turning to their biggest asset for some financial relief: Their home.
A house is one of the biggest investments a person will ever make.
Financing it can be expensive, especially when interest rates are at their peak.
However, due to the recent economic overhaul, a mortgage loan modification is available to those homeowners who are feeling the devastating effects of the current economy.
Many homeowners are finding that instead of being foreclosed on, modifying the terms of their loan can not only allow them to remain in their homes, but also lower the payments to a more affordable monthly rate.
The main goal of a loan mod is to make sure that the borrower continues to live in the home, while the bank or mortgage company gets paid as well.
The ugly alternative would be repossession, bad credit reporting and a bank left responsible for a property liability.
President Obama's stimulus plan allows for these borrowers to obtain a loan modification in which the terms of the original loan are changed in order to make payments more affordable.
This can include the interest rate, in this case 4.
5%, fees, terms, life of loan, and even the mortgage balance itself.
Ultimately, though it may cost the financing institution to sacrifice some profit, most of these mortgage companies and banks find it a viable option compared to a deficit.
The first steps to finding out if one qualifies for a mortgage modification is by contacting a loan modification service.
This service will walk the customer through the program requirements, and begin to work on a manageable application that will alleviate much of the homeowner's debt responsibility.
A modification of this nature is relevant to its users and effective in its purpose of personal economic stimulus.