Struggling to pay a mortgage can put a homeowner under significant stress because they are already worried about their financial situation and not being able to pay the mortgage means they might lose ownership of their own home. This is where Loan modification comes in handy. The Loan Modification is the process of changing the terms of an existing loan by a lender. Loan Modification may involve a reduction in the interest rate, an extension in the length of time of repayment, changing the very nature of the loan, or all of the above.
This is generally done when a borrower is unable to repay the original loan and is mostly employed in cases of huge loans like Mortgages. In this article, we will explore and discuss five proven and cost-effective strategies that loan modification lawyer in Brooklyn employ to save clients money and assist them in keeping their homes.
Strategy 1: Negotiating Lower Interest Rates
The interest rate has a significant impact on the total repayment costs over the life of a mortgage loan. Even a small reduction in the interest rate can result in thousands of dollars in savings for a homeowner. Experienced attorneys, with their fine negotiation skills, can vouch for the lowest possible interest rate from the lender on behalf of their client. The lawyer can highlight the homeowner’s circumstances and ability to keep making payments at a reduced rate. This process directly translates into lower monthly payments for the borrower and more affordable loan terms.
With the help of an experienced Loan Modification Lawyer in Brooklyn, you can reach a win-win interest rate reduction with the lender, and even a small reduction rate, for example, 1%, can significantly impact your monthly payments and your financial situation as a whole. Let’s take an example: imagine your mortgage loan is $200,000, and with a 7% interest rate, you pay $1064 as a monthly payment, but if the interest rate becomes 6%, then you’ll have to pay $959. This is a saving of $60 per month, which might not seem like a lot in the short run, but in the long run, these savings can amount to a lot of savings.
Strategy 2: Extending the Loan Term
Apart from the interest rate, the tenure of your loan also plays a major part in determining your monthly mortgage payment, which can be extremely high when you’re going for a short loan term. By negotiating with the lender to extend the total loan term, Foreclosure lawyers can significantly reduce your monthly payment amount.
For example, modifying a 20-year remaining mortgage term to a new 30-year term would allow the same principal and interest to be repaid but spread out over an additional ten years. This simple change can significantly reduce your monthly payment by 25%. This provides immediate financial relief and cash flow flexibility to you, ensuring your financial health is up to the mark. Loan Modification Lawyers in Brooklyn are experienced with increasing the loan tenure of hundreds, if not thousands, of individuals. That’s why they can help you in improving your financial situation by reducing your monthly mortgage payment.
Strategy 3: Principal Reduction
One can also negotiate with the mortgage lender for a reduction in the total principal left but lenders rarely reduce their principal amount because it means a lot of loss for them. But there are certain cases where smart Brooklyn attorneys have been able to reduce the principal amount of their clients. Even relatively small principal reductions of 5-10% can lead to noticeable savings and lead to lower monthly payments. For example, a $10,000 reduction on a $200,000 mortgage could save over $60 per month.
Strategy 4: Waiving Fees and Penalties
Throughout any mortgage loan, various fees and penalties are often levied on the loan amount, such as late charges, lawyer fees, unsuccessful payment fees, or foreclosure costs. These fees can quickly add up and increase the total balance owed by the homeowner. A diligent and smart loan modification attorney will fight to have any unfair, excessive, or unreasonable fees waived or lowered as part of the negotiation process with the lender.Â
Because lenders are often willing to reduce or eliminate these fees to facilitate an agreement, smart Brooklyn lawyers can frequently get thousands of dollars in fees removed.
If you are already struggling with making payments, the reduction of fees and penalties will equate to instant savings and one less financial burden. Through their proficiency, an experienced lawyer can potentially save $5,000 or more in penalties and fees, resulting in lowered loan repayment for their client.
Strategy 5: Securing Government Assistance Programs
Finally, an experienced loan modification lawyer can help you pay off your mortgages by identifying the right government relief programs and assistance that is suitable for you.
Programs like the Home Affordable Modification Program (HAMP) provide incentives to lenders who modify loans for deserving borrowers struggling with mortgage payments. To benefit from this scheme, a lot of lenders are often willing to discuss modifying the loans of deserving candidates.
Also, as Brooklyn attorneys are very well-connected and experienced, they know how to successfully navigate these programs and put their clients in the best position to qualify for the benefits of this program.
These programs can include lowered monthly payments, reduced interest rates, principal reductions, and more. This assistance can amount to thousands of dollars in savings and financial relief, allowing you to reduce your financial liability and save your home.
In many cases, the assistance programs provide a mutually beneficial loan modification outcome for both the homeowner and the lender. By taking the help of the government, experienced lawyers can create a win-win situation and savings for their clients.
Conclusion
When facing difficulty in paying off your mortgage loan or unaffordable payments, getting help from an experienced Brooklyn loan modification lawyer can make all the difference for your financial future. Attorneys have the skills, knowledge, and negotiation experience to advocate for significantly better mortgage repayment terms on the borrower’s behalf. Through proven strategies like lowered interest rates, extended loan terms, reduced principal, waived fees, and secured government assistance, substantial cost savings can be achieved.
If you are facing financial challenges and want to keep your home, consult with Real counsel law firm today. The right loan modification lawyer can provide the most cost-effective path to saving money through renegotiated terms. With professional legal help, maintaining your homeownership is possible despite financial setbacks.