Loan modification vs. Refinance
One of the bankruptcy attorney’s our company works with wrote a very interesting article today regarding loan modifications and how they may benefit a homeowner more so then refinancing.
Homeowners who can’t afford their mortgage payments can get a better deal from their lender. Loan modifications or mortgage modifications are designed to keep the homeowner in their homes though changing the terms of their existing mortgages to something more affordable for the homeowner. Refinancing on the other hand aims to simply pay you’re your existing mortgage by securing a new mortgage, at a different interest rate, or term of years, coupled with a host of closing costs. The key to remember is that a refinance doesn’t pay off the debt; it just restructures it, and generally adds to the principal owed.