An estimated 6 million homeowners are, as of right now, behind on their mortgage payments. If you are one of these homeowners, odds are you have thought about home mortgage refinancing or modification. So, for homeowners considering these options, here are the differences between a mortgage refinance and a home loan modification.

The economy is going through hard times, people are losing their jobs, and a lot of homeowners who bought their home only a few years ago, when the housing market was hot, are now feeling the wrath of a dramatically falling home market. A lot of homeowners are stuck with mortgages that are worth more than their homes are now worth. So, here is some help to figure out which option is better, financially, for you.

Homeowners who are considering either a Home Loan Modification or a Mortgage Refinance must figure out the following:

-Know How Much You Can Afford
Know what you are capable of paying towards a home loan modification. Lately, mortgage lenders and banks have been charging fees and closing costs based upon what a persons salary is. This means if you make a lot, but have large debts, a home refinance or modification could cost a lot. The savings though, usually always heavily outweigh any costs.

-Be sure about how long you are going to actually live in your home.
Knowing this, will help you choose which refinancing or modification program is right for you, or if either one is even beneficial.

Home Mortgage Refinancing Options available to Homeowners:

If you are a homeowner who has recently attempted to refinance your home mortgage, it may seem like mortgage lenders and banks are scrutinizing your paperwork, and asking for a lot of additional information. This is because the restrictions on lending have considerably tightened. Banks and mortgage lenders take not only your credit rating into account, but also will verify your income and ability to actually repay the loan they extend to you in the time provided. It is very hard to find “No Doc” or “Stated Income” home mortgages in todays economy.

It is advisable to pay off as much debt as possible. Anything you can pay down, or better yet, off, will dramatically increase your chances of not only being approved, but actually getting good rates, terms, and conditions. Look into the home mortgage refinancing and modification options available to you today by talking with your current mortgage lender, or a potential lender. Take control of your situation and start saving money now.

-M Petrone

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