what is the difference between loan modification and refinance loan

A loan modification is just that...your current loan may change either by it's interest rates, but usually, it is an "extension" of your payments. Let's say you are 2 months behind, they may forbear those 2 months and put them on the end of the mortgage, or may take the past due amount and divide it over 12 months so your payments may change. For example, if your mortgage was originally 360 months, now it may be 362 months, or if your payment was $1000 a month, it may now be $1200 for 12 months.

A refinance is usually a completely different loan and can result in additional closing costs. With a loan modification there are usually no fees incurred.

Hope this helps!

A loan modification is with your current lender, and while I have read other postings about fees, I did not have to pay any for my modification. Basically, I went to my mortgage company and explained that I was having a hardship but wanted to keep my house, I filled out some forms, answered some questions, and got a temporary adjustment to my payment terms--not to the actual balance of the mortgage. Mine is for three years, reduced interest and interest only payments. At the end of the three years, my unchanged principal balance is reamortized for the remaining life of the loan, and I will be back to paying principal and interest both (slightly higher principal payments because I won't have paid any for three years, and the loan payoff date remains the same). I'm not sure what other modification types are available out there, but that's mine.

A refinance would, of course, be paying off your current lender with funds from a different lender, whom you would then owe the money to instead.

Now I went through a company and got my loan modified with my same loan company. With this, I got permanent lower payments along with a lower fee for the duration of my loan, unless I decide to refianance. I had gotten behind again, so needed to do something. I am going to have to pay a fee to the mortgage company, but for us, it is a small price to pay.

We had tried to refiance and our mortgage company would not let us....they are WaMu!!! Do your research, talk with your mortgage company and see if they will work something out with you and if you are not satisfied or they cannot, then check into other avenues. I lucked out with a company that did a good job, and yes I had to pay them, but again, for us, it was worth it.

I do know we found out that we were charged fees that were "snuck" into the contract, among other things, so.....

Start at one place and then go forward from there.

Contact Sun trust Funding. A lot of the time Lender's will just say if you are not behind on your payments... the answer will more then likely be No. Or the borrower gives the lender to much information and it ends up hurting the borrower in the end. With the company that I listed above, they will tell you up front if they can help you and if they cant they will give you at least second option. and that they have attorneys that back them to even the playing field between lender and borrower. Obviously there will be a fee ( nothing is free) I do know though that rates and fees vary on the case. Now if you go through the lender because they happen to say yes you will not get as low of a rate that you could get if you go through a third party. ( even playing field remember. lender can't take advantage.) And right now in my opinion and dealing with this situation day in and out It is probably one of the smartest investment you can make. 1st and for most you get to keep your home. ( whole purpose to finding out this info right.)If anyone has ever made a serious investment they know that you spend a little to make things work properly. Please check them out your homes are your's and your families memories. I think that just that in itself should be enough to call and get the help you need. :0)

I can't afford to pay the fees that those companies want, and amazingly enough after all of this financial drama in the markets and the bailout, when I recalled both of my mortgage companies, NOW they'll talk to me.

I do have a question, does anyone know if including my husband's new income now that he is working will help or hurt me as far as anything goes?

What you will probably have to do is send them a budget of all that you have going out, with and without the mtg payment. As far as hurt or help, it could go either way. They are going to look at what you have left over after you pay everything (not including the mtg payment) to decide whether or not to modify the loan or if they feel you can afford pymts to stay the same or increase. If you can, you might want to let someone look over your mtg papers to see if you were charged any of the "hidden" fees. Do want to say that if your mtg company does do the modification, most of the time you can expect to pay a fee to your mtg company for them doing this. Yep, they get you coming and going.

I didn't have to pay a fee to my mortgage company. However, the way I originally submitted the papers, we didn't have ENOUGH income to qualify because we didn't have enough to pay all of our bills even with a modification. The rep worked with me to change things around (taking off credit card payments since we were filing BK and adding overtime that my husband was receiving at the time), so that then we showed enough income to pay what was left but not too much to qualify for the modification.

I went through a Tampa, Fl company called Mortgage Modifiers. They have a 100% money back guarantee and they only charged me one months mortgage payment to show my bank that I could resume payments after my hardship. It was quick and well worth it.

Will a loan modification work if you've never been late on any of your bills, including your mortgage?

I have a fixed and variable home equity loan. Now, I went to my bank to see if they could consolidate the two loans into just one with the lower rate on my variable loan. They said that it is impossible for me to get the lower rate for the whole home equity loan. Please let me know if this is correct.

Can anyone tell me if there is a reputable company out there that will do what they say? Has anyone had any sucess doing a modification? Help do not want to lose my home.

What state are you in?

Sorry, that last post was directed toward castlewrightdesign1.

There are a bunch of companies jumping on the Mod bandwagon. It is important that you know what to ask before calling one.

My wife and I were barely able to make bills after losing job so we used Legal Group Network.

we modified the loan on our home through a 3rd party attorneys firm called Homesavers i spoke to joel (516) 883-8816 and they offered a 100% money back guarantee...saved my home and lowered my interest rate in about 7 weeks

Has anyone had success in lowering your principal balance through a modification, in addition to getting a lower interest rate? Seems like most posts indicate lower payments and/or rates, but no one specifically states lower principal balance....

I mean, while having your monthly payment lowered is valuable particularly if you can't otherwise make your payment, it can be sometimes done by stretching out the term. Again, if you just need a lower payment, that's great. But maybe not such a great deal over the long term if all they did was term out your balance over a new 30 year period. I'm hearing advertisements that claim they can lower the principal balance AND rate. Anyone experiencing this?

I been trying to call you Cj about my loan modication seen phone is disconnected

On my modification I had a ARM that spiked. Also I got behind when I went in the hospital. They lowered it 4.5% on rate. Increase 1% in 12 mos. year 2 and 3 lower 1/2% before settling at 6 % for duration. Saved me about $450 a month.

For a permanent fix, I am happy to help anyone who wants to see if they would qualify.

You can lower your principal balance, lower and FIX your interest rate or a combination of them both.

For any additional answers, please feel free to contact me.

Thanks!

can you only modify primary homes? My investment property was my primary home before we bought our existing home, so it is still a "primary home loan"

We can modify both primary and investment properties. A mortgage is a mortgage.

i am paying my mortgage through the equity accelerator program with suntrust. payment is on time but other bills are sometimes late because of lack of enough funds.i want to lower my monthly payments and pay for what the house is worth now sine home values have decreased. what should i do?

so, let me get this straight. Your wanting to have your mortgage lowered to what your house is valued at now?

I just wanted to make sure I understood what you were asking.

I hope everyone here understands the difference between a modification and a refinance.

Modification will simply modify your existing loan with your current mortgage company. Usually you have to submit a budget and they cut your interest rate, remove mortgage insurance, etc. One company I've had a couple of my friends go thruogh is NACA. They are non-profit and really do work.

Refinance can be with your current lender or a different lender. This will include a whole new loan, closing cost, etc.

I work for a mortgage broker and even though it would be great for my pay to take every loan I can get, I don't like putting people in to a bad situation. If you're having a hard time making your note, modification is a much better option than a refinance, not to mention there will be no fees to pay (whether they're rolled in to your loan or you have to pay them out of pocket).

Mortgage brokers already don't have the best reputation, but any broker with at least a little bit of conscience will tell you a modification is the right option for you.

Edited was spoken of very favorably from a couple of people that have used them, edited, 100% money back guarantee no complaints at all w BBB

A loan modification is going to be a change in terms with the existing lender. The lender modifies your current loan to make payments more affordable. The way i see it is a loan modification saves the lender tons of dollars oppose to having them foreclose. So while its best for a lender to agree to a loan modification opposed to foreclose on a home, they arent just going to modify that easily. I have several friends who wanted to avoid having to pay a reliable company to do their modification and went directly through the bank instead. However, like state above by another user, the lender rejected them because they didnt show enough of this or too much of that.

My husband and i went ahead and did it with a company called Magnus Financial in Los Angeles, Ca (we are in arizona) and got our interest and monthly payment reduced. We got a new fixed interest rate locked in for the rest of the life of our loan. We are very happy with the result magnus was able to obtain for us. From the beginning they let us know it was 100% money back. We went ahead and checked them out against the better business bureau at bbb.org. For those of u who want to modify but dont know what company is reliable u can check reliability in that website.

Of course there is a fee associated with having another company do your modification but for us it was a very small price to pay to save our $300,000 home.

Take advantage of the help the president has made available to us having a hard time keeping up.

P.s
Heres Magnus Financials phone number for anyone interested
866-576-5004.

How was your experience with Magnus Financial?

I had fallen behind on my mortgage payment for personal hardship reasons. My loan company was VERY understanding. I was given a workout plan. I had to pay for three months on time for my regular loan amount except they gave me an extra month to start the plan. Then after the three months, they worked out a loan modification while adding the total owed to the end of the loan. The loan modification also gave me a lower interest rate with a lower monthly payment. This also helped with bills from my current condition. What a blessing! I am truly blessed!

If you have equity and good credit you may be able to refi but it will be for no more then 80% of the current appraised value. You have to come up with 20% plus closing cost.

A modification will cost the same if not less and have a lowered interest rate and more going toward principal witch over time is bringing LTV closer to where it belongs. (If negotiated right) A good company will push to have loward rate for the life of the loan or a minimum of 5 years with a 1% step not to exceed agreed upon fixed rate (normally current rate fixed) So you get a 2.5 for 5 with a max of 6 your looking at 8 years of lowered payments and higher principal payments ...

This is an example of a successful case I've witnessed first hand

There really is no need to hire a company to get a loan modification for you. Most banks offer this option to their customers for free. The hired attorneys/realtors have just as much, if not, LESS power than you do when it comes to communicating with the bank to get loan modification. It's a waste of money to hire someone to wait on the phone to speak to a customer care professional, just as you would from the comfort of your own home. You are already in default, why SPEND MORE MONEY on something that you could do yourself!?

I am currently separated from my wife and have been released from the liability on both 1st and 2nd mortgages on the house we had lived in through bankruptcy that I filed for my debt. She is still living in the house, and I've quit-claimed the house to her. She would like to do a loan modification with both of our incomes (which total 90K per year) to reduce the mortgage payments on the 1st and 2nd. Two questions - will this make me liable again for the mortgages if we do this with both of our income? We plan to file for a divorce after she has the payments on the house under control for her to afford (her income is $65K). OUr current monthly payments on both mortgages is $3100. Would it be better for her to go for the loan modification based on her income only?

We qualified for a modification but also have been approved for a refi at a rate 2 points lower then before. Our modified payments would be $250 less then the refi amount what would you reccomend doing...

Does anyone know what "should" someones expenses versus their income be in order to qualify for a modification? I am giving my loans another shot at modifications using the Obama "Making Home Affordable" program.

I assume I should add up the following:

mortgage payment
property taxes
property insurance
minimum monthly payments on all credit cards
average grocery and gas costs monthly

should I also add in all non-credit items, such as cell phones, car insurance etc?

The total mortgage repayment should not exceed 31 percent of your income.
This is the only requirement for the Making Home Affordable program. The 31 percent should include everything you have listed above.

Mike

I guess I'm dumb, but I am confused!

For easy round numbers lets take $1000 as my income figure ... Do you mean that if I make $1,000 a month, that all of my expenses (including both of my mortgage payments) can't be over $310 (which is 31%)?

I believe I would let her do it on her income alone because the less the income the less the payment. And in my opinion if you sign the papers together agreeing to the loan modification then yes you are responsible to pay it back.

what? that's impossible!

My loan was modified by Chase...my question is this...they left the # of months remaining the same, changed variable rate to fixed rate and the new loan amount is brought all late fess and past unpaid INTEREST into the new loan amount...so effectively we refinanced for FREE...my question is this... since we "paid off" interest will that be considered tax deductible as "paid" in 2009???

I have a company that wants 1495.00 to do a modification. I dont have it . I am two months past due. What can I do

Is a lien or something put on your home when you get a loan modification. If so, what does a lien mean?

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