Calculator
Loan Modification Savings Estimator
A loan modification changes your interest rate or loan terms to lower your payment. See exactly how much you could save.
Loan Modification Savings Estimator
See how much you could save if your lender agrees to modify your loan terms.
Dealing with mortgage trouble? Find a foreclosure specialist in your area.
Find a CDPE Specialist Near You →What Is a Loan Modification?
A loan modification permanently changes the terms of your existing mortgage — your interest rate, loan term, or both — to make payments more affordable. Unlike refinancing, you don't take out a new loan. The lender adjusts your current loan, often reducing your rate by 1-2 percentage points or extending the term from 30 to 40 years. This is typically available to borrowers who can demonstrate financial hardship and are at risk of defaulting.
Common modification programs include FHA Loss Mitigation, VA Loan Modification, and each lender's proprietary hardship programs. The application process involves documenting your income, expenses, and the hardship event (job loss, medical emergency, divorce, etc.).
Modification vs Refinancing vs Forbearance
Modification permanently changes your loan terms. No new loan, no closing costs, no credit check in most cases. Best for borrowers who can't qualify for refinancing due to credit damage or negative equity.
Refinancing replaces your loan with a new one at better terms. Requires good credit (680+), positive equity, and income documentation. Involves closing costs (2-5% of loan balance). Best for borrowers in good financial shape who want a better rate.
Forbearance temporarily pauses or reduces payments. Your loan terms don't change — you owe the missed payments later. Best as a short-term bridge (3-6 months) during temporary hardship, not a long-term solution.
How to Apply
Contact your loan servicer (not your original lender — check your mortgage statement for the servicer name). Request a “loss mitigation application.” You'll need: proof of hardship (letter + documentation), last 2 months of pay stubs, last 2 years of tax returns, bank statements, and a monthly budget worksheet. The process typically takes 30-90 days. Do not stop making payments while your application is pending unless your servicer explicitly tells you to.