A couple weeks ago, I went to my local bank to get my mortgage, and a broker told me that I was going to be approved for an advisor.

After some questioning, the bank agreed to provide me with a personal loan.

I had my mortgage written off and was looking forward to refinancing the loan.

A few weeks later, the same broker told my bank that the loan would not be approved and would have to be paid by my lender.

I thought to myself, I am in the middle of the foreclosure process, and this is not something I would have anticipated. 

This is not unusual.

In fact, it’s almost unheard of. 

Most borrowers who apply for an adviser’s loan get a personal mortgage and a loan modification.

That is, they get the loan modification they are applying for and get the modification they requested, not the original loan modification (and, in most cases, the original payment amount).

If they were to pay the original mortgage and get a modification, they would get the original principal, but then pay off their principal in full, as opposed to having to pay it back over the life of the loan with interest. 

The loan modification usually adds another 10-20% or so to the original total principal. 

There are exceptions, however.

A lot of lenders offer a 10-year extension on the loan or an extended repayment plan, but only for a limited period of time.

For example, if the original home buyer did not want to take out the mortgage outright, but wanted to pay off the loan and have the loan paid off over a 10 year period, they can make an extended payment of up to 30% of the principal balance. 

In my case, I had the option of either paying off my mortgage and getting a loan reduction, or refinancing it to a lower amount, and paying the difference. 

As of June 2017, the Federal Housing Administration (FHA) has set up a process for lenders to offer these types of loans.

If you have a loan that is in default and are in the process of foreclosure, you will need to apply for a personal loans modification, but you will not need to pay down your mortgage entirely. 

Lenders will then consider a borrower’s income and need to make a modification based on your age, income, and assets, among other factors. 

When I was in college, I applied for a loan with a 3.86% interest rate.

When I applied, I said I wanted a personal lender because I was planning on buying a house.

That was fine with me, until I started looking into the loan modifications available. 

I decided to take the loans with the highest interest rates and saw a lot of people who could make a decent amount, or more, on them.

I was surprised to see that there were also a lot fewer loan modifications offered to borrowers under 25. 

If you are interested in this, check out the  FHA’s website  for more information. 

Some lenders offer loans to borrowers with limited incomes and assets. 

For example, I have two loans with a 30% interest fee that are up to 3.95% and 2.85% respectively.

If I am going to take a loan to pay for my home, I want to pay my mortgage in full. 

These are the kinds of loans that many people who have been on the sidelines for years do not want. 

It is difficult to make an informed decision when you are facing foreclosure.

For the most part, it is not worth the risk, but it is a risk that you should consider when you decide to make the move. 

You might also like: How to Re-Invest Your Savings and Invest Your Money For more financial education, you can also take a look at the  Financial Literacy for the Elderly (FLL) booklet from the National Center for Education Statistics. 

Get More Free Financial Education: The FHA has a Frequently Asked Questions for all loans that require modification, including personal loans, loans to individuals, all types of loan modifications, private and corporate loan modifications, and all mortgage modifications. 

 For all of the financial education resources you need, Check out MoneySense: the FHA has everything you need to know about personal loans, loans to individuals and mortgages to corporations.