Loan Mod. not sure of terms

[crousehaus]

Hello,
This is my first post here, but a friend recently recommended this site as I am going through a loan mod with PHH Mortgage. We submitted all of our paperwork back in March and now 8 months later, we just got our modification approval and terms. I know I should be dancing around, but I'm not sure it is going to work. Our income-loan ratio was about 43% (including mortgage payment, taxes and insurance). The total was about $4171. The new terms seem really good -- they are keeping our loan life the same (we have 27.5 years left) but are lowering the interest rate to 4.375% for the life of the loan. We have to pay about $2K in fees within the next couple of weeks.
The new interest rate, plus taxes and interest work out to about $3517, which puts our loan ratio at 38%. I was really hoping for something closer to 33% as that would allow us to deal with things like a sick day here or there or even a roof leak or something that is bound to happen. At the 38%, we can make that payment, but will have nothing left over. Anyway, can I call and ask them to modify the terms even further? I feel like I'm looking a gift-horse in the mouth, but I don't want to be in the same spot in 6 months.
We were late with a few payments, but are currently up to date -- aside from late fees, which will be tacked on to the end of our loan.
Thanks for any advice.

[litehouse01]

Be careful how you present that to them as you don't want to give the impression it will be difficult to pay as I assume you have nothing signed yet so they can pull it out from under you...Choose your wording carfully.

[Evan Bedard]

Hi Crousehaus welcome and thank you for joining.

The new interest rate, plus taxes and interest work out to about $3517, which puts our loan ratio at 38%. I was really hoping for something closer to 33% as that would allow us to deal with things like a sick day here or there or even a roof leak or something that is bound to happen. At the 38%, we can make that payment, but will have nothing left over. Anyway, can I call and ask them to modify the terms even further? I feel like I'm looking a gift-horse in the mouth, but I don't want to be in the same spot in 6 months.

What interest rate did they modify the loan to?

You can reject the offer and try to renegotiate for a better interest rate. But if you do, the modification you received will no longer be valid and you may have to start the process over. Also along with that there is absolutely no guarantee they will give you a lower rate.

I have actually seen homeowners acheive a modification, and later down the road apply again becuase of struggles they were facing. Some people can get a another modification from their lender even after they have already gotten one in the past. But be aware that many lenders will require you to wait at least 12 months to reapply for a new modification..