YourLoanChoice.com is dedicated to providing you with the best Loan Modification solutions available. Here are a few Loan Modification related Frequently Asked Questions to keep you on track. At any time you can simply fill out our no hassle 90 second application and have a Loan Modification Specialist contact you immediately to help you with modifying your loan. Our Loan Modification Specialists are ready to answer any questions you can ask. Start here!
What is a Loan Modification?
A Loan Modification is a modification to an existing loan made by a lender in response to a borrower's long-term inability to repay the loan. Loan modifications typically involve a reduction in the interest rate on the loan, an extension of the length of the term of the loan, a different type of loan or any combination of the three. A lender might be open to modifying a loan because the cost of doing so is less than the cost of default.
Should I
Refinance?
The equity in your home (what it’s worth minus
what you owe) can be a good source of low-interest
funds for major purchases. Consider refinancing
(a good first choice), a home equity loan (a feasible
second choice), or a home equity line of credit
(the most flexible, but the one with the highest
interest rates) to generate cash if you need to
finance home improvements or have other major expense
for which you would be taking on debt. If you are
carrying a lot of high-interest debt, you can use
your equity to reduce the interest you are paying.
The interest will be tax-deductible, too. Just don’t
go overboard. Mortgages are “good” debt,
but they are still debt. Don’t abuse your
equity. Remember, the collateral for these loans
is your home. The home equity loan or line of credit
can be used for debt consolidation, home improvement,
major purchases, investing and education.
What
is private mortgage insurance?
Private mortgage insurance (PMI) is a form of insurance
that protects the lender against loss in the event
the borrower defaults on the mortgage. This insurance
is typically required if you make a down payment
of less than 20%.
What
is a Mortgage escrow account?
At the time you close your mortgage loan an escrow
account may be established. This account is held
by the lender so that payment of real estate taxes,
fire and hazard insurance premiums, mortgage insurance
premiums, and other escrow items are paid in a timely
fashion.
What
is title insurance?
Title insurance provides the lender and the buyer
(if you purchase owner's coverage) with coverage
for losses resulting from title defects listed in
the policy. If a title error has occurred, it may
be that someone else has an interest in the property,
that improvements encroach on property lines, or
that other similar problems may exist. Without title
insurance you could lose your investment in your
home. Lender's coverage protects the lender. Owner's
coverage is optional and provides separate coverage
for the borrower.
How
does renting compare to buying a home?
The two don't really compare at all. The one advantage
of renting is being generally free of most maintenance
responsibilities. But by renting, you lose the chance
to build equity, take advantage of tax benefits,
and protect yourself against rent increases. Also,
you may not be free to decorate without permission
and may be at the mercy of the landlord for housing.
Owning a home has many benefits. When you make
a mortgage payment, you are building equity. And
that's an investment. Owning a home also qualifies
you for tax breaks that assist you in dealing with
your new financial responsibilities- like insurance,
real estate taxes, and upkeep- which can be substantial.
But given the freedom, stability, and security of
owning your own home, they are worth it.
Still have questions?
If you still have mortgage questions or need professional
and reliable guidence on your Mortgage or Loan requirements,
feel free to have a lender contact you personally
by completing this no hastle
form.
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