Should You Accept a Loan Modification?

What Is a Loan Mod?

It changes the terms of your loan — like lowering your interest rate, extending the loan length, or adding missed payments to the balance.

Pros

  • Stops foreclosure
  • You keep your home
  • May lower monthly payment

Cons

  • Application process is long and document-heavy
  • Rejection can cause more stress
  • Not guaranteed to solve the problem long-term

If your hardship is permanent or the home needs repairs, a sale may be the better choice.