What exactly is a loan modification?
A loan modification is exactly what it sounds like. Your lender will help you keep your home by modifying your loan in some way or another. The two most common options used in a loan modification are lowering your interest rate to make your payment affordable again, or extending the term or your loan from 30 years out to 40 years, which results in a lower payment as well. Or they may use a combination of both. With the new government programs available homeowners, the government is giving lenders a substantial financial incentive to lower interest rates as low as 2.5% if thats what it takes to make your payment affordable once again.
