Loan modification is probably the best way to lower your mortgage payment. Because of recession, loan modification has become available to many consumers especially for those who are unable to pay for their current mortgage loans.

Some have lost their jobs, closed their business or have experienced drastic changes in their financial standing that they are unable to pay for their current mortgage loan. Through loan modification, debtors would be able to reduce their monthly mortgage payments and even reduce the payment period because the principal loan could be reduced as well.

But there is always complication to this type of arrangement. Before you have to be approved, you need to provide a lot of documents to show that you are really having trouble in keeping up with mortgage payment. Because of the challenges posed by lending institutions, those who wish to access loan modification benefits would hire 3rd party companies to help them prepare the documents and plead their case to lending companies. These companies are usually composed of real estate experts who have an impressive background as well as connections to help you lower your monthly mortgage payment.

Although the help of loan modification companies are quite impressive if they do their task properly, be warned. There are loan modification companies that could earn a lot more than you think from a single transaction.

Instead of getting the full benefits of loan modification, you might end up spending a little extra monthly because of their help during the loan modification transaction. This benefit could be enjoyed by the loan modification company on top of the transaction fee they will ask from the property owner which could easily reach thousands of dollars especially if the transaction was very successful.

Remember that loan modification companies are run by real estate experts. Their transactions are usually laded with commissions from lenders. That means they will be paid in extra if they are able to bring in clients. Although the end result is that the lender would have to cut the loan of their clients, they can provide incentives so that the 3rd party loan modification company could look for more property owners who would agree to save their property instead of foreclosure – a fact that many lenders today do not want to deal with since selling a foreclosed property would mean massive loss on the lender’s end.

The sad fact is that the 3rd party loan modification companies could easily get away with this added fee. The best way (so far) to prevent this type of additional spending in your behalf is to ask the loan modification company if they do profit aside from the fee that you gave them.

A better option is to look for a loan modification company or an expert in the real estate industry that you can trust. Their assistance might come with a fee but you can ask them to skip the commission so that you will reduce your monthly payment even further.

If you wanted to make sure that you get the best service without the additional fee, consider asking for help from non-government organizations. However, their assistance may not be as swift as possible since they have to deal with thousands of property owners looking for the same assistance.

Another option is to go through loan modification without any assistance at all. If you know the requirements or an expert in the said industry, you can skip the middle man and save in transaction fees by preparing the pleading the case without any assistance. Just make sure you know what to do to prevent frustration and denial of application.