It’s a buyer’s market right now, which means that it’s a perfect time for people who have bought a home in the past 10 years to refinance their mortgage. While many people are put off by the idea of refinancing, undergoing a home loan modification now could save you thousands of dollars in the future. If one of the following scenarios is true for you, a home loan modification could make sense.
1) You’re having trouble making your payments. If you’re struggling to keep up with your mortgage payments every month, a home loan modification is definitely a good idea. By renegotiating your mortgage you can extend the term of your loan in exchange for lower monthly payments. It will take you longer to pay off your real estate investment, but eliminating the chance of foreclosure is always worth an extra few years of debt.
2) You plan on living in your house for a while. People who don’t plan on living in a house for a long time will often get an adjustable-rate mortgage (ARM) because of the reduced down payment and lower initial interest rates. While this is typically a good idea, if you have an ARM and decide to live your house longer than you initially planned, you should modify your home loan to a fixed-rate mortgage. While the term on a fixed-rate mortgage is typically longer than the term on an ARM, they have much lower interest rates overall. If you keep up with your mortgage payments, then you’ll end up saving money in the long run.
3) You want to pay off your house faster. If you recently received a promotion or a substantial amount of money from an inheritance or contest winnings, then a home loan modification is the key to paying off your house faster. By increasing the amount of your monthly payments, you can lower your interest rates and shorten the term of your loan by as much as 10 years.
In the current economy, your lender should be more than willing to renegotiate your home loan. Even if you’re falling behind on your payments, a lender would rather refinance your mortgage to lower the payments than to go through the hassle of trying to collect your unpaid debt. If any of these three conditions apply to you, contact your mortgage broker today to discuss how a home loan modification can help you achieve your financial goals.
