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Now that the banks are willing to modify home mortgages you will want to know the three top items to attack. What might surprise you is that after the negotiations, many people still default. Read more to find out how to modify correctly.

If you use the services of a loan modification company you still want to know you got the best deal before you sign the agreement. First, lets look at the three areas most commonly negotiated with the lender.

These three areas are:

Rates – this is simple, it’s the interest rate. Terms – typically this is the length of the loan which now can go as long as 50 years. Principal Reduction – the bank will reduce what you owe which should decrease the payment.

You want to accomplish two things here. This is the one opportunity you will have to change the terms from the original contract, ask for the kitchen sink. Don’t let this opportunity pass you by. The other thing you want to be very careful with is your new payments. Make sure you have a cushion in case small unexpected things happen. Don’t negotiate a new plan where you are down to the penny again.

Remember, the bank representative is trying to do their best to favor the bank. The bank pays their check you don’t. Don’t rule out other options in case loan modification fails, be sure to plan financially as well as mentally in the case that you just can’t hold onto the house any longer. In some cases it’s just not worth the headaches and long term stress to keep it.

It’s always good to know what other options are available in these situations.