Loan Modification Example
Loan Modification means negotiating your loan terms with your lender. You can do a loan modification in the several ways. It can be a reduction in interest rate, reduction in principle, extending time period of the loan, deduction in default charges and late payment fees or combination of any of these or anything else other than this which is suitable for the borrower and the lender.
Here are the few examples of loan modification.
Example 1. Write-down principal
This is very simple if you just want to reduce the principal and keep interest rate and term unchanged.
For example if your current loan balances is $300,000 with a fixed interest rate of 5.5% for 30 years and you wanted to ask your lender to reduce the principal by 10%.
Example 2. Reduce interest rate
For example if your current loan balances is $300,000 with a fixed interest rate of 7.5% for 30 years and you want to at what interest rate you can get your monthly payment to $1,350.
Example 3. Re-amortize the mortgage terms to more years
For example if your current loan balance is $300,000 with a fixed interest rate of 5.5% for 30 years and you want to know how much monthly payment reduction you can get if your loan is re-amortized to a 40 years term.
Thus, the above are the various examples of the loan modification. However, loan modification is a complex process which requires lots of documentation and the paperwork. You can download the 60-Minute Loan Modification workbook in the PDF form by California based Mike Rockwood.
Mike had done all the hard work for you. You just have to download his workbook and use the information inside it about the loan modification. Believe me, if you have a detailed information about the loan modification process, this process will be very much easy for you.