There are mainly two things that can save your home from foreclosure. One is loan modification and the other is mortgage refinance.
Refinancing helps not only in saving your home but also in saving money against the payments on your home loan. So, if you think that you are in serious financial stress and if you are sensing that you may ultimately default on your home loan payments, it is better to try and refinance your home loan now.
Things To Consider Before Refinancing
Mortgage refinance helps in lowering the interest rate on your home loan and may also be able to extend the loan term. This will help you in reducing the amount that you are required to pay each month against the home loan. However, there are various things which should be considered by you before mortgage refinance. The things that you will be required to consider before refinancing your home loan are:
1. Check with your current mortgage rate – Before you opt for mortgage refinance, it is essential for you to check with the interest rate of the current home loan that you have. If you think that the mortgage rate is higher than that of the interest rate of the mortgage market, it is better for you to opt for refinancing.
2. Check with the criteria for refinancing – Try to find out the criteria for getting a new home loan. Check your credit report and your credit score. You need to have a good credit score in order to qualify for a mortgage loan. Thus, you should try to get the copies of the credit reports and the credit scores.
3. Find the worth of your home – It is better for you to try and find out by how much you owe on the primary mortgage and what exactly is the worth of your home. It is also important for you to determine if any equity has built up against your home.
4. Check with the current mortgage rates – The mortgage rates have had lowered considerably in the year 2010. So, try to find out the interest rate in the current market.
5. Shop for mortgages and find potential lenders – Shop for different mortgages and try to find potential lenders. It is important for you to talk to the lenders or may be a credit union. You may also be able to check with mortgage options online.
6. Gather all of the important documents – Gather important documents which you will be required to submit for getting a mortgage refinance loan. You will be required to submit the bank statements, the pay stubs, your income tax statements, and also the W2 forms from your employer.
So, before you opt for mortgage refinance it is important for you to check with the different steps for refinancing.
This was a guest post written by Jessica Bennet