Agreement to Modify Interest Rate on Promissory Note Secured by a Mortgage
What is this form?
The Agreement to Modify Interest Rate on Promissory Note Secured by a Mortgage is a legal document that allows the parties involved to change the interest rate specified in an existing promissory note. This form modifies the original loan agreement and ensures that the updated terms are recorded appropriately. It is distinct from other financial agreements because it specifically addresses modifications to interest rates while maintaining the integrity of the original mortgage terms.
Key components of this form
- Date of the agreement
- Names and addresses of the Mortgagor and Lender
- Loan number and details of the original promissory note
- Specified new interest rate and effective date
- Clauses concerning the continuation of other terms of the original agreement
- Signature lines for both parties and notary acknowledgments
When this form is needed
This form is useful when a borrower and lender mutually agree to adjust the interest rate on a loan that is secured by a mortgage. Situations may include changes in market rates that prompt a borrower to request a lower rate or when a lender wishes to offer more favorable terms. Completing this agreement formally updates the terms of the loan while ensuring that both parties acknowledge the modification.
Who needs this form
This form is intended for:
- Borrowers (Mortgagors) who have an existing promissory note and wish to negotiate a new interest rate
- Lenders who are considering offering a reduced interest rate to borrowers
- Real estate professionals or attorneys assisting clients with mortgage-related modifications
Completing this form step by step
- Identify the date of the agreement and write it at the top.
- Enter the names and addresses of both the Mortgagor and Lender.
- Provide details of the original loan, including the loan number and a copy of the promissory note.
- Specify the new interest rate and the effective date for this change.
- Ensure that both parties sign the document, including any required notarization.
Is notarization required?
This form needs to be notarized to ensure legal validity. US Legal Forms provides secure online notarization powered by Notarize, allowing you to complete the process through a verified video call, available anytime.
Common mistakes to avoid
- Failing to include the effective date of the new interest rate.
- Not recording the agreement with the appropriate county office.
- Leaving out signatures from either party, which can invalidate the agreement.
Benefits of completing this form online
- Convenience of downloading and completing the form from any location.
- Editability allows users to customize the form to their specific needs.
- Access to attorney-drafted templates ensures legal reliability.
State-specific requirements
This form is a general template that may be used in several states. Because requirements differ, review your state’s laws and adjust the document before using it.
Form popularity
FAQ
If your modification is temporary, you'll likely need to return to the original terms of your mortgage and repay the amount that was deferred before you can qualify for a new purchase or refinance loan.
When you take a loan modification, you change the terms of your loan directly through your lender. Most lenders agree to modifications only if you're at immediate risk of foreclosure. A loan modification can also help you change the terms of your loan if your home loan is underwater.
Starting the Document. Write the date at the top of the page. Write the Terms of the Loan. State the purpose of the personal payment agreement and the terms for returning the money. Date the Document. Statement of Agreement. Sign the Document. Record the Document.
The Promissory Note is hereby modified and amended by deleting the last sentence of the first paragraph of the Promissory Note in its entirety, and replacing it with the following: All outstanding principal and interest shall be due and payable on June 3, 2012 (the Due Date).
You have to be suffering a financial hardship. You have to show you cannot afford your current mortgage payments. You have to be able to show that you can stay current on a modified payment schedule.
To secure a promissory note means that you identify some specific property and attach it to the note. Then, if the borrower defaults on the loan, you will be able to repossess the collateral as compensation for the loan.
Either way, it stays on your report for seven years.
The Loan shall be evidenced and governed by a new promissory note (the New Note) which amends and restates in its entirety, but does not extinguish, the Note. Anything to the contrary notwithstanding, if any inconsistency exists between the Loan Agreement and the New Note, the New Note shall control.
Loan modification is when a lender agrees to alter the terms of a homeowner's mortgage to help them avoid default and keep their house during times of financial hardship. The goal of a mortgage loan modification is to reduce the borrower's payments so they can afford their loan month-to-month.
