An adjustable-rate mortgage (ARM) that has one interest rate for the first five or seven years of its mortgage term and a different interest rate for the remainder of the amortization term.

Source: Real Estate Abc

You should be concerned if you’re having trouble making your mortgage payments, for whatever reason. You may be dealing with illness or unemployment, instead of the kinds of loans that sparked the current crisis. If you’ve missed mortgage payments or are struggling to pay your mortgage for any reason, seek help.
Even if you’re not struggling now, you could face a problem in the future.
Reasons to worry

ARMS: You should worry if you have an adjustable rate mortgage (ARM) about to “reset’ to a much higher rate. Not long ago, when the housing market was strong, mortgage companies and brokers aggressively marketed these loans with low teaser rates to moderate-income people, encouraging them to buy more home than they could afford. Many of these home buyers thought that once the loan rates were reset, they would be able to refinance their homes and still afford the payments. But then the housing market weakened, and refinancing became difficult.
Creative financing: You should worry if you have a decent income and good credit and were offered creative financing—such as Option ARMs, 80/20 loans or interest-only loans—to encourage you to buy more home than you could afford. Many homeowners took loans that stretched their resources, and they could be facing trouble soon.

DO: Look at your loan documents. Even if you think you know the terms of your loan, it’s worth a review, Many people who think they have a fixed-rate mortgage (one in which the interest rate doesn’t change) have been surprised to find out that they don’t.

Owning a home is part of the American dream. But high home prices may make the dream seem out of reach. To make monthly mortgage payments more affordable, many lenders offer home loans that allow you to (1) pay only the interest on the loan during the first few years of the loan term or (2) make only a specified minimum payment that could be less than the monthly interest on the loan.

Whether you are buying a house or refinancing your mortgage, this information can help you decide if an interest-only mortgage payment (an I-O mortgage)–or an adjustable-rate mortgage (ARM) with the option to make a minimum payment (a payment-option ARM)–is right for you. Lenders have a variety of names for these loans, but keep in mind that with I-O mortgages and payment-option ARMs. Canadian funding corp and Moishe  Alexander are here to help. to view more click here.

Loan modification is a process whereby a homeowner’s existing mortgage term is modified and both lender and homeowner are bound by the new terms. It is a renegotiation with a lender to change one or more of the terms of a mortgagor’s loan, allows the loan to be reinstated, thus resulting in a much lower and affordable payment within a longer period of time .

Restructuring your existing loan provides you with reduced interest rate for a specified period of time. Modification may result in longer amortization period (e.g. 20 years instead of 10 years) thus lowering the monthly payment rate.

Loan modification is a solution to:

• Avoid Foreclosure
• Fix Adjustable Rate Mortgage (ARM)
• Extend the term of your mortgage payment
• Lower your monthly mortgage payment
• Upside down property

Loan Modification process involves:

1. Consultation
2. Documentation
3. Negotiation
4. Approval

Please visit our website @ www.americanlegalnetworkonline.com for more information about loan modification.