Pinoy Reviews

Speaking of refinance, there are some certain criterias that some banks need you to qualify for before they could grant you a refinance. If your loan amount is greater than your home value, chances are, you might be declined for a refinancing scheme. Don't fret, there are other options. Loan modification is one option that homeowners choose when they get declined for refinancing.

Of course, there are criterias that you need to be qualified for but it's less stringent than refinancing. With a loan modification, the homeowner's mortgage is modified by: fixing the adjustable mortgage rates, extending the term, reducing the principal balance, lower interest rates, and forgiving past due accounts and fees.

You can apply for a loan modification yourself or through your loan broker.

Those low mortgage interest rates seem tempting and some of you might consider refinancing your fixed interest rate mortgage. However, before you call your mortgage broker to refinance, think things over and consider these factors:

1. Consider how long you're going to stay in your home. Refinancing usually means extending your loan payment terms. If you don't plan to stay in your home for the long haul, the closing costs alone will outweigh the low interest payments.
2. Fixed rate or Adjustable rate. Most people refinance in order to get out of either of these two types of rate. Adjustable interest rates may be good for high interest rate environments while its the other way around in low interest rate environments. The market is still unstable these days and some are waiting for the rates to bottom out.
3. Lower appraisals, higher equity needs. Home prices are still declining and some banks are raising their equity needs and in some cases, asking for upfront payment. You might end up paying more rather than saving more.