Distressed homeowners trying to decide the best way to get help with getting an affordable loan payment should consider two options-loan modification versus refinance-but which one is best?  That depends on the borrowers individual circumstances and which option they will qualify for as well as which will accomplish the goal of a lower home loan payment.  When trying to decide which avenue to pursue, here are a few of the pros and cons of each option:

Each borrower must carefully review their own situation to determine if a loan modification vs. refinance will work best for them.  First, will their credit, income and current home value meet the guidelines for a refinance?  Because many areas have experienced severe depreciation, many homeowners may find that they now owe more than their home is worth.  This makes a conventional refinance extremely difficult.  In addition, financial difficulties resulting in late payments will usually result a a much lower credit score, again causing difficulties when apply for a mortgage loan refinance.

There is a government sponsored refinancing program named Help for Homeowners.  Under this program, distressed borrowers are offered a government insured fixed rate loan program.  The new loan is based on 96.5% of the homes current market value.  However, the existing lender must agree to take the write down for the difference, and since this is a voluntary program, not all lenders will agree to cooperate.  Interested borrowers should contact their lenders to find out their policy about the Hope for Homeowners program.

When analyzing a loan modification versus refinance, remember that a loan modification will not require a high credit score, and that a decreased home value may actually work in your favor.  A lender will consider it a better investment to modify an existing loan rather than foreclose on a property that has a much higher loan balance than the lender could sell it for.  It is simply more cost effective to modify the loan and keep you in the house making payments. 

Before deciding which option is right for you, take the time to research, learn and prepare so that you can make informed and wise decisions.  This is your family home and credit, you cannot afford to make a mistake.  A loan modification may be the best option to lower your interest rate, and achieve the affordable monthly loan payment you need to stay in your home.  There are several options available to troubled homeowners, and an informed and prepared borrower has the best chance of receiving the help they need by choosing the best option for themselves.

You can get the help you need to understand your options and the  loan modification process by ordering and downloading The Complete Loan Modification Guide. This is a low cost, easy to read handbook that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender.

 Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.

For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com