Loan Modifications May Result in an Increased Payment

Loan Modifications May Result in an Increased Payment

This may sound bizarre to you and contrary to how a loan modification is supposed to work, but not every bank will offer a loan modification that lowers a homeowner’s mortgage payment. Some banks will offer a loan modification that increases the payment. Bank use ratios, often capping a certain percentage of your gross monthly income, to determine a new mortgage payment. If the financial statement warrants, the bank may ask for a higher payment.