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Loan Modification Calculator
Loan modifications help borrowers avoid foreclosure by permanently changing note terms. This calculator compares modified vs original payments when combining rate cut, term extension, and principal forbearance.
Modified monthly payment
$1,647
Current monthly payment
$2,156
Monthly savings
$510
Lifetime interest change
-$82,308
positive = more interest paid
How the math works
Loan modification can combine three levers: lower rate, extended term, and principal forbearance (arrears or portion of balance set aside as non-interest-bearing lien due at payoff). All three reduce monthly payment, but term extension also raises total interest.
Modifications are processed through the servicer's loss mitigation team. Fannie/Freddie Flex Modification and FHA Modification are the standard frameworks. Borrowers with hardship documentation (job loss, medical, divorce) have the best approval odds.
How to Use
- Enter current balance, rate, and months remaining.
- Enter modified rate and term.
- Enter principal forbearance (arrears or partial balance set aside as non-interest lien).
- Compare current and modified monthly payments.
Frequently Asked Questions
How do I qualify for modification?
Document hardship (job loss, medical, divorce, disability). Provide current income, hardship letter, and financial statement. Servicers' loss mitigation departments evaluate using standardized waterfalls (Fannie Flex Mod, FHA-HAMP, VA COVID-19 loss mit).
Does modification hurt credit?
The modification itself is reported neutrally, but any delinquencies leading to it are reported. Modifications often resolve 30-90 day lates into 'paying as agreed' after a trial period of 3-6 months.
What's a trial modification?
A 3-6 month period where you make the modified payment to prove ability to perform. Successfully completed trial results in permanent modification. Missed trial payments can jeopardize the deal entirely.
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