A mortgage is one of the heaviest expenses that individuals have, which is why it’s so common to fall behind on mortgage payments. But there is a way that they can change the terms of their mortgage in a manner that’s beneficial for them and make it easier to stay current and build equity. This process is referred to as modification.

A modification is a process of altering the contract of an original mortgage. Through it, an individual can change the terms that were agreed upon when they purchased the property, either extending or shortening the mortgage period, getting a principal reduction, or reducing the interest rate, among others. 

Banks can grant mortgage modifications to anyone, whether they are current on their payments, behind on their mortgage, or in forbearance. They have allocated extra funds to use for this purpose, and sometimes even give equity. 

There are many things that individuals can do with a good modification, such as:

• Change the period of the original mortgage
• Reduce the interest rate 
• Reinstate a loan
• Ask for a payoff
• Refinance  
• And more 

The bank is the ultimate entity that decides what they can offer an individual, based on their unique situations. But with a good offer, a modification can significantly be of benefit. 

There is also the choice of accepting the modification or not. If an individual decides not to accept the modification, they can reject it and stay on the original terms of the mortgage. It’s important to speak to a lawyer to help identify which modifications are worth accepting. 

Not everyone can qualify for a modification, and it’s important that individuals know if they are eligible in order not to waste time and money going through the lengthy process only to get denied. 

In order to obtain a modification, a person must:

1. Have enough income to qualify 
2. Be able to make three trial payments 

It’s only when these two requirements are met that a permanent modification will go through. 

All financial accounts and assets that belong to the marital property will matter in a divorce proceeding — including modifications. There are specific factors that go into modifications in a divorce, such as who the borrower is and whether it should be part of the marital settlement agreement. 

It’s a unique situation that requires the knowledge of a skilled lawyer. An attorney can provide feedback on what should be done as modifications are concerned in relation to a divorce.

Lawyers can assist their clients in getting good modifications. While it is the bank that decides on the terms, lawyers can set the client’s perspective and give them an idea of what they can expect. They can also advise on whether or not an offer is worth accepting, as well as provide guidance on unique situations, such as modifications during a divorce.