TBO.com - TBO is Tampa Bay Online

Mortgage Questions Answered

ADVERTISEMENT

The Tampa Tribune

Published: November 12, 2008

Can a restructured mortgage include an interest rate reduction?

Yes - to lower monthly payments, a lender might decrease the mortgage interest rate either permanently or temporarily.

A principal reduction, or forgiveness, lowers the total principal amount the borrower owes on the mortgage. That, in turn, decreases the monthly payment.

How can changing the length of the loan help a struggling borrower?

To lower payments without changing the interest rate, a lender can extend the time required to pay off the loan. For example, a lender might restructure a 30-year mortgage as a 40-year loan, shrinking the payments by stretching them over an extra 10 years.

What is a short sale?

A short sale is when a lender allows a borrower to sell the home for less than what's owed on the mortgage, and accepts that amount as enough to satisfy the debt. For a borrower, a short sale is less detrimental on a credit report than a foreclosure, but it's still a hefty stain.

Who else can help borrowers?

Borrowers are encouraged to contact their lenders or mortgage servicers as soon as they think they may fall behind on a payment. The sooner contact is made, the easier it is to head off larger problems.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT