Economy struggling to recover, unemployment is high, and as a result there are many people who are behind on their mortgage payments and risk having their homes foreclosed. You can also opt for specialised mortgage solutions to compare home loans & mortgages.
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To help people save their homes, mortgage companies and the federal government touting the benefits of a loan modification and home owners buy into the idea to modify their mortgages in record numbers.
But before modifying the mortgage loan, homeowners should consider the true cost of their mortgage refinancing and expensive to cure mortgage arrears in the case of Chapter 13 bankruptcy instead.
Loan modification is often a lengthy process. Many people, who apply for a loan modification, do not receive a response until a year after the process begins.
After months of sending documents, jump through one hoop after another, they are often denied for their loan modification and eventually filed for bankruptcy to save their home.
It may involve closing costs which may or may not be rolled into the loan is modified, further increasing the amount financed.
If the lower the interest rate the loan modification may be a better option than bankruptcy because of the cost of paying interest on mortgage arrears recovered in a loan modification may be offset by the savings gained from lower interest rates.