What Is a Loan Modification?

Описание: 🏡 What Is a Loan Modification?
A loan modification is a permanent change to one or more terms of a borrower’s existing mortgage, made by the lender, with the goal of making the loan more affordable and helping the borrower avoid foreclosure.

Unlike refinancing — which replaces your loan with a new one — a loan modification alters your current loan. It’s most commonly used when a homeowner is struggling to make payments due to financial hardship.

🔧 What Can Be Modified?
Lenders might:

Lower the interest rate

Extend the loan term (for example, from 20 years to 30)

Change from an adjustable-rate to a fixed-rate

Forgive or add missed payments to the balance

Reduce the principal (rare, but possible in some cases)