Refinance To Prevent Foreclosure Instead Of Loan Modification?
Can a homeowner in mortgage default refinance to prevent foreclosure rather than mortgage loan modification? In most cases, absolutely! The next brief summary of what’s necessary to successfully pursue this different should provide you with a good general concept of which option–refinancing or loan modification–is right for you.
The first factor involved with having the ability to refinance your home of all time foreclosed upon is having equity in your house. This means that you have to owe less money in your mortgage compared to house is currently worth. In order to refinance to prevent foreclosure instead of mortgage loan modification, you’ll usually need at least 10% equity in the home. If you have less than that, or haven’t any equity in your house at all, then automatically loan modification becomes your better option.
One more thing you have to refinance to stop foreclosure instead of mortgage loan modification is decent credit (or at best it helps greatly). While mortgage refinancing programs do indeed exist for individuals with poor credit, they’re usually costly options that only get people into bigger problems than what these were already looking to get from. Refinance loans for those who have bad credit will also be less and farther between than they were in the past.
You’ll want to remember that if you’re already in foreclosure, then chances are your credit was already affected. Refinancing is generally most successful when you are only 1-3 months behind inside your payments, because that information might not have shown up on your credit reports at this time. For those who have poor credit, however, then you will probably come with an easier time stopping foreclosure using mortgage loan modification.
Everything having been said, even with relatively decent credit along with a sizable amount of equity in your home, lenders are often reluctant to grant refinance loans to individuals in foreclosure because they’ve already shown themselves to become default risks. Because of this, even if you’re in a position to refinance to prevent foreclosure instead of mortgage loan modification, the terms of the refinance might be so undesirable that the loan modification still may be your better choice.
NOTE: By researching and comparing the best mortgage loan modification company reviews in the market, you will determine the one that meets your very specific financial situation.
You are very welcome to visit the Loan Modification Companies website – where you can review the best resources to stop foreclosure.
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