Refinancing vs Mortgage Loan Modification
Many homeowners are searching for a way to lower their monthly mortgage payments. Refinancing a mortgage loan to a lower interest rate is one way to accomplish that.
Sounds like a good deal, right? Not always! There are a few things you should consider before signing that refinancing application.
(1) Refinancing the loan creates a new mortgage loan, which will subject you to fees for inspection, appraisal and closing costs. Refinancing a mortgage is often a tedious and disappointing process for many people looking to reduce their mortgage payments.
(2) If you have limited income for additional costs, or less than excellent credit, may find it hard to get approved for refinancing of their mortgage loan. Loss of income, late mortgage payments, or declining property values, can prevent you from refinancing your mortgage.
For many people, the additional costs associated with refinancing are simply not do-able. After all, why would you need to refinance if you weren’t having money trouble to begin with.
Am I Out Of Options?
Luckily, the answer is No.
A mortgage modification may be able to provide a reduced monthly payment in many ways without the additional costs. A mortgage loan modification negotiates more favorable terms and conditions to the existing mortgage loan. In most cases, you work with your lender to change conditions of your loan to reduce your monthly payments.
Benefits of Mortgage Loan Modification
The different types of mortgage loan modifications provide many benefits:
- By extending the length of the loan can reduce your monthly payments without adding any additional interest to the principal loan amount. This provides families who intend to stay in their homes for long periods of time an opportunity to reduce payments by paying on the loan for a few more years.
- Reducing the interest rate on the mortgage loan for a short period of time, allows you a chance to reduce your payments when experiencing a financial crisis. In mortgage loan modification, lowering the interest rate is a temporary modification designed to prevent the property from going into foreclosure during a time of brief financial hardship.
- Lenders may also modify terms of the principal amount of the loan. The lender may grant you a second mortgage, in which you pay back default fees and missed payments separately in at zero percent interest.
- Lenders may also reduce the principal amount of the loan with no expectations to be repaid for the loan reduction, sometimes referred to as debt forgiveness. You should know that lenders are free to use their discretion when modifying terms of the mortgage loan. Lenders look at the borrower’s financial status and payment history to determine< <qualifications>> for mortgage loan modification.
Our attorneys have years of experience helping people reduce their monthly mortgage payments and keep their house out of foreclosure. We want to see you stay financially stable ans succeed as a homeowner. Don’t let anyone tell you that you have no options! We can guarantee that we can help you negotiate a solution with your lender that fits your budget and lifestyle!