Loan Modification Advantages Over Bankruptcy_46775

Instead of resorting to bankruptcy, many homeowners are appealing to their lenders for a home loan modification so they can continue to pay their mortgage. Some of their options are a reductions in either their interest rate, the principal balance or in monthly payments. It is true that bankruptcy is an option for borrowers who hare having trouble paying their monthly mortgage bills. Bankruptcy does not guarantee that foreclosure will be avoided. Whenever it is possible, a loan modification is preferred over bankruptcy. Here are some convincing reasons to choose a loan modification instead of filing for bankruptcy: After you have started bankruptcy proceedings, you have no control over whether the bank forecloses on your home or not. Filing only stops the lender from asking you for your payments. A loan modification lets you pay off your loan over time, which means someday you may own your home forever. After you have filed for bankruptcy, your credit score will be profoundly affected, so much so that you might never qualify for a mortgage again. If you are able to qualify, your terms may be very high. Once again, it is much better for you to get a loan modification. At least if you negotiate a lower payment, you are still paying down your mortgage and keeping your credit rating. It is never good to file for bankruptcy as it does not help your credit score and stays on your credit record for a long time. Alternatively, a loan modification indicates that you are a reliable, trustworthy homeowner and your credit scores are strengthened. If your lender reports your new agreement to the credit bureau, this well-planned loan modification might even improve your credit rating. In the long run, it is better to negotiate a loan modification rather than file for bankruptcy. Dealing with your debts maintains a good credit rating, unlike bankruptcy, which can destroy it for many years. Given the current economic situation, many Americans are looking at the possibility of defaulting on their mortgage and eventually facing foreclosure. It is better for these homeowners to get help from their lenders instead of filing for bankruptcy.