A loan or mortgage modification is when your lender modifies your current loan or mortgage in order to work with you because of a financial hardship. The purpose is to help make your loan or mortgage more affordable. Loan or mortgage modifications are usually in the form of an interest rate reduction and fixing or setting the interest rate for a specific period of time.

In the past loan or mortgage modifications were only used when homeowners (borrowers) were past due (delinquent) and had suffered some kind of a financial hardship such as a job loss (layoff), divorce, medical illness, or other financial hardship. 

Today, homeowners (borrowers) can obtain a loan or mortgage modification from their lender when unaffordable interest rate adjustments have been made on adjustable rate loans or mortgages. 

Start Early

The earlier you start working to obtain a loan or mortgage modification the better your chances are of negotiating a fixed interest rate and a loan or mortgage payment that you can afford.