Recent problems in our economy have wrecked millions of homeowners finances. This makes paying the monthly mortgage payment a real challenge for homeowners, which only gets harder every month. As other debts increase, and your money decreases, something will need to give. This is when refinancing or modification of a home mortgage can make sense.

Refinancing or modifying a home mortgage loan is a very good financial answer for a lot of homeowners. With a refinance, you can decrease the amount of interest you pay, which decreases the amount of your monthly mortgage payment. This money that is saved can be used for anything which the homeowner wants, though it is a good idea to have a general plan of what you are going to do.

However, there are a lot of homeowners, whom a mortgage modification or refinance would make perfect sense for, yet believe that it will not be the right choice for them for whatever reason. Maybe this is due to the fact that they do not even know where to start, let alone how to do it right. To avoid this situation for yourself, try to remember the following points:

-Always be aware of any closing costs or fees in addition to the interest rate being offered to you by your mortgage lender or bank. While interest rates are crucially important, there are still other financial things which need consideration. One of which is closing costs. If you are getting a quote with both high interest rates and excessive closing costs, than perhaps you should look around for a different lender. Finding different lenders and banks, using the internet, is very easy to do.

-Figure out if their any prepayment or early pay penalties or fees associated with your current home loan. Typically, these fees are found with fixed rate home loans, but can also happen in ARM (Adjusted rate mortgage) loans. In order to prevent their profit being easily lost through a refinancing or modification, a lender will sometimes, not always, have a penalty charge for paying off payments early. Not all loans have this included in them though so ask you current lender or loan provider. So, always make sure, and include into your costs, whatever any prepayment penalties or fees may cost.

-Always have all promises and quotes detailed and written down on paper. Refinancing a home mortgage is no small task, so ensuring that the rates and conditions you have been quoted is in your best interest. Before agreeing to anything with a lender or bank ask for it all to be written down and given to you prior to finalizing anything. If you are still not sure about terms, conditions, or anything else included in the loan documents, speak with a lawyer to clear any questions up.

-M Petrone

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