“Hi Gary. My wife and I are way upside down on our home and behind on our payment. Our bank has suggested we apply for a loan modification. Do you think this is a good idea?”
Answer:
If you love your home and you’re not that far upside down and can make the lower payment, a mortgage modification is a great idea.
The downside to a loan modification and keeping the house is that you’re still trapped in an upside down home. It could take years for you to see daylight, meaning to have any equity at all. And if you’re going to lose your home anyway, better to take the credit lumps now and get it over with and start rebuilding your credit sooner.
