Loan Modification or Mortgage Refinancing?

Because of the new bill enacted last March 9 that aims to help solve the housing problems in the country, a lot of homeowners are now looking for options as to how they can make their home mortgage loan easier to maintain and pay for every month.

Now, most homeowners are thinking of whether to take advantage of the new loan modification program or to get FHA refinancing. Read on for more information and so you can decide for yourself as well.

In the Making Home Affordable plan, only home mortgage loans that are backed by either Freddie Mac or Fannie Mae can be refinanced or modified. Currently, the government is still working on adding similar loan modifications to VA and FHA loans. At present, there are no new legislation on this move yet.

If the economic crisis is weighing down on you and you cannot pay for your home mortgage loan, you can consider different options. As mentioned earlier, you can either apply for home mortgage loan modification or get FHA refinancing. Choosing between the two would depend on who is insuring your loan. If you are not sure about this, you can contact your lender and ask for the necessary information.

If your loan has insurance from FHA, you can look into the Hope for Homeowners mortgage refinancing program. This lets you refinance to easy-to-afford fixed-rate home mortgages through sharing equities. This can help you avoid foreclosures and immediately get a home mortgage refinance.

Equity is the amount of money that you have already paid off in your home mortgage loan. When you do your home refinancing through Hope for the Homeowners program, you are agreeing to divide your equity with the FHA if you choose to sell your home. The scale for this action depends on the time since your home refinance occurred. If, for example, you sell your house within the year, 100 percent of your equity would belong to the FHA. If you sell your property more than five years later, you would be able to split the equity 50-50. Home for the Homeowners home mortgage refinance program is available only until September 20, 2011.

If your home mortgage loan id insured by Freddie Mac or Fannie Mae, you can still apply for home loan modification through the Making Home Affordable program. This is different from home refinancing. Lending companies should follow a series of steps for them to be able to lessen your monthly payment up to 31 percent, by starting on decreasing your interest rate.

This entry was posted on Friday, April 24th, 2009 at 4:22 am and is filed under Refinancing Home Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.