Loan Modification Attorneys in Cicero, Illinois

We Can Help with Loan Modification in Illinois

Our loan modification attorneys have helped countless clients save their homes by modifying the terms of their existing loans. Our firm’s founding lawyer, attorney David O. Koch, began his legal career representing banks during foreclosures proceedings.

This experience gives our firm insider knowledge of what matters most to lenders. As a result, we’re able to design and propose loan modifications with terms that are advantageous to our clients and acceptable to lenders.

Loan Modification vs Refinance

A loan modification simply changes the terms of your existing home loan. Refinancing your mortgage involves paying off your existing loan in full with a new loan, typically from a different mortgage lender.

How Loan Modification Can Help

Loan modification programs can be broken down into four main categories, each with its own set of advantages and disadvantages. It’s also important to note that lenders are more likely to approve a loan modification program if you are behind on payment or your loan is underwater.

Reducing the Interest Rate of Your Loan

When interest rates fall after you’ve signed your existing mortgage, it may be possible to modify your loan to take advantage of the lower rates. Doing so can lower your monthly mortgage payments as well as the total cost of your loan.

Changing the Loan Term

Extending the term of a loan can prove advantages for individuals struggling to afford monthly payments on their loan. Unless combined with additional loan modifications, extending your term will result in a higher total cost of the loan. But because that cost is spread out over a longer term, monthly payments will decrease, which may be necessary to avoid foreclosure.

Changing the Structure of Your Loan

If your loan has an adjustable interest rate, it’s often beneficial to change it to a fixed-rate loan. Doing so will make your monthly payments more predictable. Plus it prevents your interest rates from rising over time, which would otherwise result in higher monthly payments and a higher total cost to repay the loan.

Principal Forbearance

If you’re having trouble making payments on your loan, principal forbearance sets aside a portion of your principal to be paid at a later date. The forebeared portion of the loan is typically free from interest. However, the “balloon payment” for the forebeared portion is often rather sizable. So be sure to adjust your budget to ensure you’re able to pay it when the time comes.

How Refinancing Can Help

Refinancing a loan allows you to shop around for lenders and enter into a completely new loan with more advanced terms. Refinancing is typically advantageous if you are current with your payments and have at least some equity in your home. It may include any of the adjustments that are possible with a loan modification except for principal forbearance.

Other possible advantages include:

Shortening the Term of Your Loan

If you’re looking to pay your loan off sooner, you may want to shorten its term length. This will result in higher monthly payments. However, the shorter the term of a loan, the less time it will have to accrue interest. Shorter-term loans also tend to have lower interest rates.

Cash-Out Refinancing

A cash-out refinance involves taking out a loan for an amount than greater than the balance of your existing loan. In doing so, you would receive the difference between the existing and new loans in cash. This can be a good way to pay off other high-interest debts, such as credit card or medical debt.

Does a Loan Modification Affect Your Credit

It is possible that modifying your loan can negatively impact your credit score. However, late mortgage payments also negatively affect your credit. And foreclosures have an even more negative effect. With this in mind, loan modification should ultimately improve your credit score, even if it causes it to fall in the short term.

Have You Tried TARP? Let Us Help You Now

If you have already tried dealing with the Troubled Asset Relief Program (TARP) yourself, you probably already know how difficult it is to get a bank to actually work with you. Instead of trying to navigate this path yourself, turn to us.

We make it a point to treat each of our clients the way we would want someone to treat our loved ones. When you work with us, we commit to listening to your case, learning about your legal needs and crafting a legal strategy responsive to your unique circumstances.

Our Illinois firm holds more than 50 years of combined experience, much of it spent representing the needs of financially distressed clients. That experience in debt negotiation, bankruptcy and debt negotiation means we can help you understand all of your available options and then choose from those options wiselysely

Find Out What Legal Option Best Fits Your Needs

Most initial consultations are free. Call 708-683-9097. We can also be reached online if you prefer.

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