In the context of mortgage options, what does modifying a loan refer to?

Modifying a loan refers to altering the terms of an existing loan agreement, which typically includes changing the repayment schedule while retaining the original loan. This process is often undertaken to make mortgage payments more manageable for the borrower, especially if they are facing financial difficulties. A loan modification can involve extending the length of the loan, adjusting the interest rate, or changing other loan terms to help the borrower avoid foreclosure and make their payments more sustainable.

In this context, the other options do not accurately represent what loan modification entails. Changing interest rates for better terms indicates a refinancing scenario rather than a modification. Switching the property title involves a transfer of ownership rather than altering the loan agreement. Filing for bankruptcy is a separate legal process for debt relief and does not specify any changes to a mortgage contract. Therefore, modifying a loan primarily focuses on restructuring the repayment terms rather than these other actions.