Musicians often change a note’s pitch or duration for artistic effect. Similarly, in banking, note modification achieves a desired alteration.

In the banking industry, a note is essentially a promise to pay your loan back, which is why it’s also referred to as a promissory note. If there’s a need, you and your bank may mutually agree to make certain changes to the original note agreement, called note modification.

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Note modification can be useful to tweak your original contract while avoiding the need to draft an entire new document. It might include alterations to the principal amount, repayment schedule, or other contractual provisions associated with the financial transaction.

When is note modification a feasible idea?

At INB, we understand businesses and individuals face many issues that are often dependent on the changing economy.

Currently, we are seeing significant competition in the housing market, with inventory low and demand for new homes still quite high.

Due to this competition, homebuyers today often want to buy a new home without first selling their current home. While you used to be able to make an offer on a new home with the caveat that the offer was subject to the sale of your current home, that kind of term isn’t accepted right now because homes are moving too quickly in the current market!

That’s where note modification comes in for qualifying buyers. If you haven’t sold your current home, you won’t be able to use the cash equity from that sale on a down payment for your new home unless you take out a bridge loan. (As a reminder, though, you will always need a minimum down payment of 5%.) However, after you’ve made your first payment on your new home, you can use the sale proceeds to make a principal reduction to the new mortgage, and INB may be able to modify your note with no fees.

Typically, this involves reducing your payment – because you were able to finally use your sale proceeds for a larger down payment – and may even allow you to cancel private mortgage insurance and escrow.

At INB, if a homebuyer has at least $10,000 to put against their loan, we will complete a free note modification to fulfill your goal of reducing their monthly payment and/or changing your amortization schedule.

Why would INB take on the extra effort to change your note?

It’s all part of our mission to “make banking easy.” 

At INB, we realize that note modification can be an essential step in accommodating a borrower’s changing financial circumstances, mitigating risk, or facilitating smoother repayment schedules.

In today’s dynamic economic environment, this flexibility gives you the tailored financial solutions you need to navigate challenges or work toward new opportunities to achieve your financial goals.

Talk to an INB Lender today!