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Mortgage Refinancing Versus Loan Modification – By Bryan Dornan


Alright – Raise your hand if you have the ability to pay your mortgage payment each month, but you stopped making your payment in hopes of lowering the interest rate on your current home loan. How many of you have stopped paying your mortgage because one or more of your neighbors reduced their interest rate and lowered their payments?  If you raised your hand, you are not alone, because thousands of good credit borrowers who have not suffered from income loss have stopped making their mortgage loan in hopes of receiving quick payment relief. 

Home refinancing activity has almost come to a complete stop.  FHA refinance loans remain the only bright light for mortgage lenders and brokers, but even the government refinancing has slowed in recent months.  Interest rates dropped almost half a percentage point yet refinancing activity reports indicate little increase.  Once we get past the foreclosure crisis we expect mortgage refinancing activities to elevate back to normal levels.

Modifying your mortgage is just but those of you who have a stable job, we recommend not taking the approach of not paying your monthly payment in hopes that it will send a signal to the bank that they better modify your mortgage or else…Millions of homeowners are in line to get their loan modified and banks are clearly doing their best to accommodate homeowners with payment vacations and reduced mortgage rates. 

Pay your mortgage on time if you can afford your monthly payment because keeping your credit score high is imperative to maximize your future home financing options.  When the banks report you 30, 60 or 90 day late on your home mortgage it has a lasting derogatory effect on your credit score.  Besides, banks do negotiate loan modification with homeowners who are not late.  Times have changed and bank negotiates with homeowners who make their payments on time.

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I couldn’t agree more. I have run into so many of my prime borrowers who can absolutely afford their mortgage, but if there is a better deal to be had with lower rates and lower monthly payments they are ready to go. My refinancing business has almost come disappeared. check out this site I ran across for homewoners who need help.


The loan modification option seems to take like 2 or 3 months. How are you able to stop the foreclosure process in the meantime?

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