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Homeowners suffering with mortgage debt may have more options than they think. Although mortgage modifications are one of the most sought after types of mortgage debt help, they are also the most denied by lenders. While pursuing a solution to mortgage debts is a matter of ending up in foreclosure or keeping one’s home, knowing when to choose a mortgage modification versus an alternative is crucial.

Saying Yes

Mortgage modifications are popular for two reasons. First, you get to resolve mortgage debts while you keep your home. Second, there is generally no costs associated with securing this type of arrangement. Unlike refinancing, a mortgage modification does not involve out of pocket expenses by way of closing costs. Pursuing a mortgage modification is a great first step for homeowners who have the time to negotiate a plan and are not too far behind on their mortgage payments.

In other words, if your home is not currently in foreclosure and you have missed less than two mortgage payments a mortgage modification should be considered before all other options. When discussing a mortgage modification with your lender it is important to know which type of modification you are looking for. Most modifications involve a temporary suspension in payments or interest rate, a waiver of delinquency fees, an extension in the life of the loan or a principal mortgage write down. Temporary suspension in payments or interest fees is a good modification for those who are experiencing a small financial hardship brought on by temporary circumstances. Hardships that are expected to last longer in duration may want to consider requesting an extension in the life of the loan. In general, principal mortgage write downs are reserved for those who are considered underwater on their mortgages, but have been offered more recently for in other situations.