Choosing Between Loan Modification Vs. Refinancing..........

Struggling homeowners in American are now able to receive help with keeping their homes by choosing between refinancing or lowering their monthly mortgage payments through a loan modification. Known as the Home Affordable Plan, it is available to qualified applicants. Here are the facts on the plan:

* Under the Home Affordable Modification Plan, homeowners facing financial hardship are able to obtain a lower interest rate despite plummeted property values or bad credit. In turn, lenders receive incentive payments for the modified loans. You can be looking at a 2% reduction to your existing rate, a loan term extension to 40 years, and principal deferral. This is especially important to those homeowners whose property values have suffered and who cannot otherwise sell or refinance.

* Have you been unable to refinance? The new plan offers qualified homeowners with a new loan at the current market rates. With Fannie Mae or Freddy Mac, they require your mortgage be at least 105% of the current value, and that you have not been more than 60 days late in your payments the past 12 months.

* Did you know the Hope for Homeowners refinance plan can now help more homeowners? So far, this FHA insured plan has completed only 70 loans, so there are now new guidelines to allow more homeowners to qualify. Your lender will be provided an incentive payment by the government by creating a refinanced loan at the existing market rates.

You can find more information about the various plans by visiting the site http://www.makinghomeaffordable.gov. To apply for any of the modification programs, you must first complete an application and submit a financial statement. The best thing you can do to improve your chances of being approved for any of the plans is to be prepared and have all your documents ready for review. You only have one opportunity to apply, so use this chance wisely!