Lowering Mortgage Payments Through Modifications And Refinancing–How Homeowners Are Exploring Their Options

There have been changes in the housing market in some areas when it comes to homeowners who are attempting to lower their payments or avoid foreclosure as the situations that homeowners face currently have varied in terms of the problems they face and potential solutions that may be available. Most homeowners are aware of modification plans that are available from their servicer or federal programs but there are also refinancing opportunities that are available to help homeowners find more affordability in their mortgage payment, despite the fact that rates have increased slightly due to concerns over the national debt and a solution to our debt ceiling problems.

However, there have also been some reports that lenders are willing to modify a homeowner’s home loan by simply allowing them to move from an adjustable-rate mortgage to a fixed mortgage, due to the fact that many banks and even some investors feel that ARMs are riskier and may lead to more homeowners missing payments or even defaulting. Yet, when it comes to the options that homeowners are exploring at the present time, refinancing and modifications may not be the only routes for affordability available but they are two of the more widely used plans that homeowners have been able to benefit from in certain cases.

Yet, the refinancing index has fluctuated somewhat over the past weeks as some homeowners are positioned where they are unsure of the housing market and may not want to refinance at the present time while others are in a position where they simply cannot afford to do so. There are some banks that are charging higher costs when it comes to refinancing their home loan and every homeowner cannot cover these closing costs and get a rate reduction to the extent where they will be able to benefit from the costs that come with refinancing, it may simply be a situation where a homeowner doesn’t stand to financially benefit from this particular route that can lower a mortgage payment.

Understandably, homeowners had traditionally been able to refinance their home loan, get a lower mortgage rate, and receive the benefits of a lower monthly mortgage payment but again, if higher costs are required for some homeowners the savings on their monthly mortgage payment may not be to the extent where they will recoup the losses paid in closing costs, but of course if a homeowner is current on their mortgage they may have difficulty when it comes to getting a modification.

This is where some homeowners need to remember that modification plans and state-specific programs can be available to homeowners who have seen a decrease in their income due to unemployment or job loss, and just because a homeowner is not behind on their mortgage doesn’t mean they can’t qualify for some form of assistance. Housing counselors from HAMP having been able to help homeowners explore options not only that may be available from their servicer but from programs like the Hardest Hit Fund or extension programs within HAMP that may allow homeowners in an underwater situation to refinance or to take advantage of a forbearance period while they are unemployed and looking for work.

In some cases homeowners are not helped by these options but when job loss or cutbacks in wages occur or a homeowner finds themselves in a situation where refinancing may help them reduce their mortgage payment to such a level that it could be a great relief on their financial life, some homeowners have had to simply sit down and do the homework of figuring out the costs or seeing if they qualify, as not all of these options will be available to or best for every homeowner but there may be some plans that can be beneficial for a homeowner who faces mortgage payment troubles.