Many homeowners that have lost value in their home and now owe more on their mortgage than their home is actually worth are seeking out principal reductions in order to make their home more affordable or at least make their mortgage price a little more fair when it comes to the market value of their home.
A big problem is that not all lenders agree that principle reductions are a good idea and many mortgage lenders don’t believe that they should be used on a wide range of homes. This has obviously frustrated many homeowners who believed that they were sold a home with an inflated value, and because of that reason they deserve a principal reduction so that their mortgage will reflect the true value of their home and not the inflated price.
Lenders do feel, in some cases, a principal reduction may be used as homeowners might have little alternative. In a situation where a homeowner’s home has lost value and they are either struggling to pay their mortgage as a result or they are in an area where they are unlikely to regain any of that lost value, a principal reduction should be used.
However, if a homeowner is able to make the mortgage payment or has only lost a small percentage of their home’s value, there are lenders who feel alternatives to a principal reduction should be used. If a homeowner is having trouble meeting their mortgage payment there are a variety of assistance options available that lenders, who may be opposed to principal reductions, are willing to impliment.
Any homeowner that may have lost a sizable amount of their home’s value in recent months might want to contact their lender about a principal reduction, but it might be unlikely to obtain a reduction in the value of your mortgage principal unless it’s a specific case. Yet, homeowners who are struggling to make their mortgage payment are being advised to talk with their lender about assistance options available in order to avoid foreclosure.