Why Home Loan Modification Is A Better Option Than Refinancing
The number of homeowners who have to contend with the risk of foreclosure is increasing each day
. If you find yourself in a precarious situation where you are unable to make your monthly mortgage payments or have missed a payment you have three options; you can either opt for refinancing, home loan modification or let the bank foreclose your home. If the third option is ruled out, many home owners would want to know which is the better option mortgage modification or refinancing.
The truth is that both these solutions are designed for people in different scenarios. For instance, the primary problem with refinancing is that you need a near perfect credit score, a secure job and accrued equity on your home. But given the perilous economic conditions few home owners would be able to meet these stringent conditions. Also if you are late by 30 days in making your mortgage payment it will reflect on your credit score and you will not be eligible for refinancing anymore.
On the other hand home loan modification is a more viable solution because your credit score does not come into the picture at all. A lawyer or firm that deals in procuring mortgage modification can negotiate the terms on the home loan modification on your behalf. Alternatively you could also talk to your lender directly.
Also given the exorbitant rise in the number of foreclosures and the governments acquisition of Freddie and Fanny banks are keen on modifying the terms of the loans and giving the homeowners a chance to repay their loans instead of foreclosing houses.
When you ask for a mortgage modification you are simply are simply telling the lending institution that you cannot make the existing mortgage payments and would like to modify the terms of your existing mortgage. So, home loan modification can take the shape of a reduction in interest ate on an increase the loan life. Either way your monthly mortgage payments will become more affordable after you secure a mortgage modification.
Also the primary advantage of the mortgage modification program is that you will be able to retain your home. Also with home loan modification you will be able to make money from the sale of your home when the real estate market rebounds. There are no closing costs involved when you opt for mortgage modification. Also you will not have to pay any of the typical fees associated with mortgage transactions.
If you are considering mortgage modification, you should really look into 60 minute home loan modification. It is a great resource that contains a lot of important information about the process of applying for a mortgage modification. It was created by a loan modification expert who has modified numerous home loans. The kit included a professional hardship letter outline, and one on one support in case you have any questions. It is a must have for homeowners.
by: David Pit
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