---
title: What is a loan modification?
description: Loan modifications are offered to financially-burdened borrowers struggling to make their monthly payments. Loan mods can impact future loan qualification.
---

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# What is a loan modification?

## A lender's alternation to an existing loan in response to a borrower's long-term inability to repay the loan.

A loan modification is a lender's alteration to an existing loan in response to a borrower’s long-term inability to repay the loan. Loan modifications typically involve a **reduction in the interest rate** on the loan, an **extension of the length of the term of the loan**, a **different type of loan**, or any combination of the three.

If a borrower obtained a loan modification on a prior home loan, underwriting typically needs to review the loan modification documentation **to ensure it's impact on your credit rating and other mortgage history does not adversely impact your qualification for a future loan.**

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