Right now, a very popular thing for homeowners to do is refinance or modify their home mortgage. Through refinancing or modification, a homeowner can easily save hundreds of dollars, every month, through interest savings alone.

Although every persons financial situation is different, generally speaking, a home loan refinance or modification, especially now with interest rates at near all time lows, can be a huge financial benefit. A lot of homeowners are feeling the wrath of the bad economy, and have seen their home values drop, lost their job, lost some income, or are burdened with other high interest debts. Refinancing a home loan simply means that a new home loan is obtained, with lower interest, better rates or conditions, in order to pay off the old loan which had a higher interest rate, or worse terms and conditions. The money that is saved through refinance can be used to pay down these other debts, perform home repair or improvements, or anything else a homeowner can think of.

A lot of homeowners do not realize that lowering the interest rate, even a half of a percent, can equal thousands of dollars in savings at the end of every year. Another good reason to refinance is to extend the length of your loan into say a 30 or even 40 year mortgage if necessary. Although this is not the best way to save money due to having to pay interest rates for a longer period of time, it can be a good way for financially struggling homeowners to save their home from foreclosure. You can always refinance again later should your finances, or the housing market, improve. Try to avoid getting yourself into an ARM (Adjusted rate mortgage) and go for the fixed rate mortgage option. The fixed rate loans generally have a higher interest rate, but the stability they offer more than make up for a marginal percentage increase, especially for homeowner who are financially hurting and need to plan for the future.

Refinancing or modifying a home mortgage loan
is not as hard as it may seem. Although sometimes it may look difficult, preparing yourself with basic research on lenders and banks, and comparing different loan options and offers is not hard at all. Make sure you at least look into refinancing your home loan and see if the potential savings are going to be worth it for you.

-M Petrone

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