What is a Rate Modification?

A rate modification is another term for a loan modification.  Both terms describe the same thing which is the restructuring of one's current loan terms to something new which may (or may not) be more affordable to the customer.  I say may not because some modifications include no improvement.  Others can have a lot of improvement, especially those who have a decrease in the rate, or a rate modification.

Rate modifications which include decreases in rate can save a lot of money because a reduction in the rate means that the entire rate a borrower pays the balance back at is reduced and thus, although it may not seem like as much on a month to month basis, the savings over time can be very substantial.

MAC