Loan Modification

Recalculates payments after changing rate, term, or principal through refinancing or modification.

Approach

Compute new periodic rate and term; recalc payment using amortization formula.

Example

Lowering APR from 9% to 6% on remaining balance reduces payment and total interest.

FAQs

Fees?
Account for closing costs and points.

Term extension?
Lowers payment but can increase total interest.