Can a Loan Modification Raise Your Mortgage Payment? How One Middle Georgia Family's Went From $980 to $1,750
Yes. A loan modification can make your mortgage payment go up, and for one Middle Georgia family it did: their payment went from $980 to about $1,750 a month over two loan modifications and a forbearance. The missed payments and accrued interest usually get added to your balance, the interest rate can change, and a longer term keeps you in the loan for decades. Before you sign, read the agreement, push back in writing, and compare it with your other options. I specialize in foreclosure alternatives to help families stop foreclosure in Georgia, so here is what happened to this family, what to check, and what to do instead.
Last updated: October 23, 2026
Watch: Loan Modification Gone Wrong: How it Went from $980 to $1,750
In this video:
1:53 COVID forbearance in 2021 and what it did to their balance
4:06 Negotiate with the lender and do not accept the first offer
6:00 Big mortgage companies run the numbers, so push back in writing
Can a Loan Modification Make Your Mortgage Payment Go Up?
Most people expect their mortgage payment to go up because escrow, insurance, and taxes go up. That makes sense. Most people do not think about a payment increase coming from a loan modification, and it can happen. Three things drive it. First, the missed payments and the accrued interest usually get added to your balance. Second, the interest rate can change. It does not always go up: for the family in this post, the rate went down in 2021 and jumped up in 2024. Third, a longer term, such as 40 years instead of 30, keeps you paying on the loan for decades.
Before you research how to get a loan modification approved or how to apply for a forbearance, here is what one family went through. I am not an attorney, so this is my personal experience and the experience of the clients I work with. Talk to a real estate attorney about your own situation before you go any further.
How Did One Middle Georgia Family's Payment Go From $980 to $1,750?
A Middle Georgia family called me and said they were getting into a financial bind and asked whether they should sell their house. When we went over their financials and their history, what I found was scarier than I expected. They had owned the house since 2013.
In 2017 they got into trouble and asked for a loan modification. The bank changed them to a 30-year loan at 4.25%, paying $980 a month with escrow included. That was a payment increase at the time, but it was not bad enough to cause real hurt.
In 2021, during COVID, they got in trouble again and applied for a forbearance, which let them defer payments to the back end for about a year. Their loan had been paid down to about $132,000, but when they started making payments again the balance was $140,000, because of the missed payments and the accrued interest. The bank gave them a lower rate, 3.25%, a full point below what they had, but the balance went up and the payment went from $980 to $1,250 a month.
Your next question is probably this: if they could not afford $980, how were they supposed to afford $1,250? Good question. But that is what they signed, and that is what they committed to.
In 2024 they got in trouble one more time and did another loan modification. The balance went from $135,000 to $150,000. The rate jumped from 3.25% to 7.6%, and the term was extended from 30 years to 40 years. Their payment ended up at about $1,750 a month. In my experience, what gets added to the balance in a modification is usually past-due interest and late fees.
Year | What happened | Balance | Interest rate | Term | Monthly payment |
|---|---|---|---|---|---|
2017 | First loan modification | Not stated | 4.25% | 30 years | $980 (includes escrow) |
2021 | COVID forbearance, with about a year of payments deferred | $132,000 before, $140,000 after | 3.25% | Not stated | $1,250 |
2024 | Second loan modification | $135,000 before, $150,000 after | 7.6% | 40 years | About $1,750 |
Balances and payments are as the family reported them. The 2017 payment includes escrow.
That is one family with two loan modifications and a forbearance, and the payment went up every time. Do you think that is the kind of fix that will help your situation? Probably not.
What Should You Do Before You Sign a Loan Modification?
The first thing is to read the loan modification contract. If it raises your interest rate or raises your balance, call them back, and better yet, email them so it is documented, and negotiate. Tell them what your budget can afford and what you have to stay under, and push on them a little. Do not just accept the first thing they send you.
Why Put Your Pushback in Writing?
Large mortgage servicers are too big to do anything personal. They run the numbers and run their business like a business, by the book, with no feelings and no sympathy. So do not feel bad about pushing back. If they send you a modification offer that does not fit your situation, push back and find out what other alternatives they have, because there is more than one way to handle a loan.
If you are already behind, remember that applying for a modification does not automatically stop the foreclosure clock. I explain that in my post on being behind on mortgage payments in Hawkinsville.
Is a Second Mortgage or Line of Credit a Better Alternative to a Loan Modification?
If you have a good mortgage payment and you are just going through a rough stretch, a loan modification locks the new, larger payment in for 30 or even 40 years. Another option is a second mortgage or a line of credit. You use that money to catch up the first mortgage, and the two loans together may cost you less each month than a modification of the whole balance.
Here is an example using this family's numbers. Say the loan is $132,000 and $11,000 of it is delinquent. You get a $15,000 line of credit and put $11,000 of it toward the first mortgage to get it caught up. Now you have two loans, and the two together probably will not add up to the payment on a full modification. Your total payment may go up for a while, but it is split between the original mortgage and the line of credit. Once the line of credit is paid off, you are back to your original mortgage payment. With a modification, you have the whole balance in one lump sum and you are locked in for the entire 30 or 40 years.
This is an example, not a promise. A lender may not approve a line of credit or a second mortgage while you are behind, and it adds debt, so it only makes sense if the combined payment fits your budget. If you cannot afford even your original payment, borrowing more will not fix it. Talk to a real estate attorney and a HUD-approved housing counselor before you decide.
When Is Selling the House the Better Exit?
This family still owed about $150,000 on a house worth about $250,000, which is roughly $100,000 in equity before selling costs. They weighed selling the house, pulling the equity out, and finding something smaller, simpler, and easier to take care of. In the end, they decided to keep the house and keep making the payments.
I specialize in foreclosure alternatives, like selling a house before foreclosure, getting a cash offer, and other options that may not require you to sell the house at all. A cash sale can close in as little as 7 to 14 days. If you are not sure where to start, read how to save your home from foreclosure in Georgia.
So ask yourself: would you rather let the house go back to the bank, or pull the equity out of it and take it somewhere you can get a better position and a happier life? If you owe more than the house is worth, your options are different, so call me before you decide.
How Fast Does Foreclosure Move in Georgia?
Georgia is a non-judicial foreclosure state, so it moves fast. The lender sends the foreclosure notice, formally a notice of sale under power, by certified mail at least 30 days before the sale, and the sale is advertised in the newspaper for four consecutive weeks. Then on the first Tuesday of the month, a representative of the bank or the trustee stands on the courthouse steps and sells your house at a public outcry. From the notice to the auction is about four weeks. Until the sale actually happens, it is still your house and you can usually still sell it. For the full step-by-step, read how Georgia foreclosure works with a security deed.
Are Foreclosures Rising in Georgia?
Based on what I am seeing, I expect more Middle Georgia families to end up in a spot like this over the next few years, and the national data points the same way. ATTOM's mid-year 2026 report, released July 16, 2026, had foreclosure filings in Georgia up 52% from the first half of 2025, the third-largest increase among states with at least 500 filings. Georgia foreclosure starts were up 23.3%, from 6,259 to 8,164, and U.S. filings were up 21%. HousingWire's summary lists the Macon metro among the metros with the highest foreclosure rates, at 0.36%.
For balance, ATTOM's August 2026 data, reported by WRDW, ranked Georgia 18th among states for foreclosure activity, so this is rising from a low base and not a crisis. The point is to act early, because your options shrink the closer you get to the sale date.
Frequently Asked Questions About Loan Modifications in Georgia
Can a loan modification make my mortgage payment go up?
Yes. The missed payments and accrued interest usually get added to your balance, the interest rate can change, and a longer term keeps you paying for decades. One Middle Georgia family's payment went from $980 to about $1,750 a month over two loan modifications and a forbearance. Read the modification agreement before you sign.
What happened to this family's loan with each workout?
In 2017 a modification put them on a 30-year loan at 4.25%, paying $980 a month with escrow. In 2021 a COVID forbearance deferred about a year of payments, and the balance went from $132,000 to $140,000 at 3.25%, with the payment rising to $1,250. In 2024 a second modification took the balance from $135,000 to $150,000 at 7.6% over 40 years, for about $1,750 a month.
What can I do instead of a loan modification?
Negotiate the offer in writing, ask the lender what other options it has, look at a second mortgage or line of credit to catch up what you owe, or sell the house and keep your equity. A cash sale can close in as little as 7 to 14 days. I am not an attorney, so talk to a real estate attorney and a HUD-approved housing counselor about your situation.
Should I push back on a loan modification offer?
Yes. If the agreement raises your interest rate or your balance, call the servicer back, and better yet email so it is documented. Tell them what your budget can afford and do not accept the first offer. Large servicers run the numbers like a business, so put your counteroffer in writing.
How long does a foreclosure take in Georgia?
Georgia is a non-judicial foreclosure state. The lender sends a notice of sale at least 30 days before the sale and advertises it in the newspaper for four consecutive weeks. The sale happens on the first Tuesday of the month on the courthouse steps, so it is about four weeks from the notice to the auction.
Should I sell my house instead of doing another loan modification?
It depends on your equity and your payment. This family owed about $150,000 on a house worth about $250,000, so selling would have pulled out roughly $100,000 before costs. Selling before foreclosure lets you keep your equity instead of letting the bank take the house, and it is worth considering if each workout keeps raising your payment.
Ready to Explore Your Options Before Foreclosure in Middle Georgia?
If you are facing foreclosure or a loan modification offer you are not sure about in Houston, Bibb, Peach, or Pulaski County, call or text me at (478) 273-8880 or book a time to talk. We will sit down and come up with a game plan that best suits your needs, whether that is a better modification, another option, or selling. I am a real estate agent and investor, not an attorney, so I also suggest talking to a real estate attorney. My clients rate me 5.0 stars across 20 Google reviews and 2 Zillow reviews, as of October 2026.
