Defaults are Decreasing with the Reduction of Mortgage Principal

According to a new study by the Federal Reserve Bank of New York, borrowers who have had a recent loan modification to reduce their interest rate and loan balances are the most likely not to re-default on their mortgage.

The study says that a borrower’s chance of defaulting within one year is reduced by 11 percent when only interest rates are lowered. Although, when a borrower’s loan balance is reduced by 25 percent and the interest stays the same or is reduced, the borrower’s probability of default is reduced by 26.5 percent.

Have you been waiting for the right opportunity to buy your first home? Perhaps you are looking to sell your current home?. If either may be the case or if it is something in between, contact Eddie Perez at (201) 344-2886 or go to Hoboken Condo Expert. I can help you find your Hoboken dream home.

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