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Mortgage Modification

Loan modification is an option offered by lenders to homeowners. It is only offered if the lender can't find a more profitable option. If lenders know they can collect more through foreclosure, they'll choose that avenue instead. Modification must be profitable in order for them to agree to it. Mortgage modification is a way to alter an existing loan. It makes the payments more affordable for the borrower with the help of lower interest rates or lengthening the life of the loan.


There are several things to consider in relation to modification. Homeowners who took drastic pay cuts in switching careers will likely have insufficient funds to modify a loan for a property beyond their current budget. If homeowners have more than 20% equity in their home, they usually qualify for a home equity loan. Homeowners who spend large amounts of money or obtain new debts are seen as a financial risk to lenders, often eliminating the possibility of a mortgage reduction program. In summary, a loan modification agreement is a good idea only if a homeowner has no equity, demonstrates financial responsibility, has ample income to support the modification agreement and absolutely cannot refinance.

There are hundreds of loan modification scams in operation. Homeowners considering modification need to be aware of companies that require large upfront payments, seem indifferent about personal circumstances, accept the first modification offer from the lender and have a lack of credible references. It is best to choose an attorney instead. Make sure the attorney is associated with an established law firm, is licensed to practice law and is approved by the American Bar Association. The best option for loan modification is a government program. President Obama allowed $75 billion recently to help homeowners prevent foreclosure through refinancing and mortgage modification. The new government program is called "Making Home Affordable." The process involves a consultation to gather the borrower's personal facts and circumstantial data. The next step is submission of tax, income and other required documents. Modification program specialists then perform negotiations until the best offer is made by the lender.

Mortgage loan modification isn't right for everyone. Refinancing is usually a better choice. With many new programs available, it is best to try this option before taking the risky step of loan modification. There are even several government programs available to help refinance properties owned by people who owe more than their home is worth. Researching, reviewing and comparing refinancing providers is a difficult task. To make the process simple, use MortgageFindersNetwork.com. This company is not affiliated with any of the major lenders listed in their database. Based on individual criteria submitted on a search form, the database sorts lenders and provides the most affordable matches. Comparing rates is essential in order to avoid paying more over the life of a mortgage or refinance program. MortgageFindersNetwork.com has one mission, which is to help people who need a new mortgage or refinance find the best rate. MortgageFindersNetwork.com has comprehensive guides to educate potential borrowers about several aspects of mortgages. The company also offers a helpful page of preparatory questions to guide borrowers through the loan process painlessly.

National Rate Averages

Mortgage Rates

Product Rate
5/1 yr ARM 3.147%
1 yr ARM 3.299%
15 yr fixed 3.221%
30 yr fixed 3.815%

Home Equity Rates

* Updated Jun 8, 2012