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Instead of refinancing my house I want to lower my payments by modifying my existing loan. Have any of you modified a loan before? Any advice? Is it worth it?
Back in the day that FIXED RATE loans were lower than ARMs written a few years earlier I did have my lender modify my loan. It was part of their "in house portfolio" and they were happy to do it, as it only made my loan match what was currently available AND my equity had increased both through my payments and appreciation.
Obviously that is not the situation that most people would facing today. You need to demonstrate to your lender that you are in dire straits -- if they do not reduce your payment they will be stuck with an devaluing property. Not easy to do even if you are already behind on your payments...
Of course IF you are in a tough situation AND your lender knows it THEN they ought to prefer to keep you in the property, making payments. The alternative might be the lender needing to foreclose and then sell at even bigger loss...
Really depends how bad a situation you and the lender are facing.
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