What is the Difference between a Home Loan Modification and a FHA Loan Refinance?

Posted: Aug 26, 2009 |Comments: 0 |
If you are one of so many Americans who has fallen victim to the economic recession and is finding it harder and harder to pay your monthly mortgage? If you are, you should make an appointment with a financial advisor who can go over the pros and cons of home loan modification versus FHA refinancing.There are two options available for homeowners who cannot pay their mortgage loans. They are a loan modification and FHA refinancing. The one you choose depends mainly on who insures your loan. If you don't know, call your lender and ask. There are three main insurers: Freddie Mac, Fannie Mae, and the Federal Housing Administration (FHA). These companies do not lend you money; they insure it. This means lenders have less of a risk and subsequently will offer you a lower interest rate.Is there a difference between insurers? Not really. The determining factor is your specific loan and who insures it. There isn't much difference between a mortgage insured by FHA and a loan insured by Fannie Mae or Freddie Mac. The insurer only really matters when restructuring enters the picture. Loans insured by Fannie Mae or Freddie Mac can participate in the new Making Home Affordable mortgage loan modifications. If the FHA insures the loan, refinancing is available through Hope for Homeowners plan.With a FHA loan, the homeowner should investigate refinancing. The Hope for Homeowners initiative offers hope to homeowners who have been denied refinancing in the past. Lower property values have disqualified many people from refinancing. When a house loses value, it loses equity. If equity had dropped 20%, homeowners were not eligible for traditional refinancing.There is a standard procedure for lowering your monthly mortgage payments through a Making Home Affordable loan modification plan. There are incentive payments for both lenders and borrowers that will help lead to favorable loan modification and encourage economic stability. If you have a FHA insured loan, you can get a home modification but not through the Making Home Affordable plan. The programs that deal with FHA loan modifications are not as straight forward, strict and they do not follow the same procedures.It is not hard to understand the differences between loan modifications and FHA refinancing if you have the right information. Research it and talk to a financial advisor about reducing your home loan.

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    Anna Cuevas

    Getting denied is frustrating and scary but it definitely does not mean it is the only chance that you have. If you are determined to keep your home and you know you can make a reasonable payment you have a chance to still make it work., don’t be discouraged. I know people that have been denied up to 10 times for loan modifications that end up saving their homes because of their determination and refusal to give up even when it seemed they had no hope.

    By: Anna Cuevasl Finance> Mortgagel Dec 31, 2009 lViews: 3,374
    Feldman Law Center

    Loan modification companies without any experience other than the ability to market to distressed homeowners are coming out of the wood work in masses. Taking illegal upfront fees and offering money back guarantees that don’t exist. Times are tough for ex- mortgage companies as well and they will say or do almost anything to get your money.

    By: Feldman Law Centerl Finance> Loansl Mar 09, 2009 lViews: 414

    Your family continues to be refused a Specialized Loan Servicing mortgage loan modification and you're panicking. The house is headed toward foreclosure and the stress is without a doubt overwhelming. Should you continue reading this short article, you could save your family home from the auction block.

    By: Rachel Sullyl Finance> Mortgagel Apr 28, 2010 lViews: 326

    Applying for an Aurora Loan Servicing loan modification can take some preparing and if you are not skilled in this field, the following pointers can help you be successful in protecting your family members from the anxiety of losing your property.

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    There are a lot of confusions and uncertainty going on about the home modification loan program initiated by President Barack Obama. Though the ambitious plan was meant to rescue the struggling borrowers and home owners avoid foreclosures, there seems to be a lot of myths surrounding lenders and related services as to what they have to and what they don't have to do during the process.

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