What is the Point of Renegotiating Your Mortgage?

If you have a mortgage that you have fallen behind on, you may wonder if it is a good idea to consider renegotiating your mortgage, also known as getting a mortgage modification. For some, it can certainly be a good way to stay in your home and avoid the risk of foreclosure and eviction. But what is the point of renegotiating your mortgage if you are facing foreclosure?

What Does it Mean to Renegotiate a Mortgage?

When you renegotiate or modify your mortgage, you are sitting down with your mortgage lender to discuss the terms of your mortgage, and whether it might be possible to alter them. Often, this means changing the repayment schedule, changing how much is paid each month, or making other changes to the terms of the mortgage contract. This can be done for a number of reasons, but is often seen when someone falls behind on their mortgage payments, as an alternative to foreclosure.

Why Should You Renegotiate Your Mortgage?

The biggest reason you should consider a mortgage modification is that you are suffering from financial distress and may be facing the risk of foreclosure. By renegotiating the terms of your mortgage, you can not only stay in your home, but potentially make your mortgage more manageable. You can also avoid the negative impact to your credit that might come about as a result of defaulting on your mortgage.

Why Would Your Lender Renegotiate Your Mortgage?

This may come as a surprise to some people, but your mortgage lender does not actually want to foreclose on your home. They want the money from your mortgage payments, not your house, and so they are often willing to come to the negotiation table to find a way to make your mortgage more affordable. This also saves them the time and expense of going through the foreclosure process, which can potentially take years.

What Should You Do?

If you are struggling to pay back your mortgage and you are facing foreclosure, renegotiating your mortgage is a potential strategy to pursue. However, to know what might work best for you and your needs, you should speak to a lawyer with experience handling foreclosure matters. They can advise you on all your potential options, and make sure you get the best possible outcome for your situation.

At David J. Lorber & Associates, PLLC, we assist clients throughout New York who are at risk of losing their homes to foreclosure. We will explain your options and guide you in making the best decision for your circumstances. Call us at (631) 750-0900 or contact us online to schedule your Free consultation at our Setauket office.