The average person isn’t a financial professional. Therefore, he or she doesn’t get the ins and outs of the mortgage or banking industry. If the vast majority of people are honest with themselves, they probably don’t try too hard to truly understand the details of their financial situations. (Do you read the fine print of every deal you make?)
We ask this question because of a Fox News report about what can be a helpful source of debt relief for borrowers in New Jersey and beyond. Home mortgage modifications can work as a way to allow people to stay in their homes for less money a month while still living up to a bargain with their lender. Not all of those deals might be as simple as they seem.
A legal analyst for Fox News warns borrowers to read the fine print of their mortgage modification agreements. He worries that people will wrongly believe that their reduced monthly payment means that they owe less on the mortgage overall. In some scenarios, the bank will increase the interest rate on the loan, too, leading to an overall increased cost to the borrowers.
To try to avoid the surprise of a balloon payment down the road, borrowers should not only read the fine print but specifically look for offers that forgive some of the loan’s principal payment. Those deals might not be easy to secure, but it is worth giving it a shot. Another way to avoid surprise and further financial stress in the process of trying to stay in one’s home is to work with a trusted loan modification lawyer. An attorney can help iron out and explain the details of debt relief opportunities.
Fox News, “How homeowners can better understand loan modifications,” July 25, 2013