Currently you have two options. The most common option is refinancing into a different loan program. The scond option, is a loan modification, something that is relatively new and will probably dissolve once our economy stabilizes.
Refinancing is the process in which you apply for a new loan which will require getting approved, opening escrow, getting an appraisal, etc... Currently (4/2/2009) application rates for refinances are up due to record low fixed rates. Exploring this option has never been better with people looking to cut personal expenses to weather the economic downturn, rising taxes, and likely inflation with 1.2 trillion in fresh currency still steaming off the Fed printing presses.
The other option referred to above, known as a
loan modification involves petitioning your lender to modify your current note. You can request this direclty but most elect to go through a company. If you do make sure they are reputable. If you do it yourself you will want to ask for the loss mitigation department. Loan mods require proof of hardship. I highly recommend you avoid this road unless you aboslutely need to pursue it. It can have serious effects on your credit for reasons I will not get into here, and that could jeopardize future opportunities that you don't want to miss.
Refinancing is definitely the wiser choice over pursuing a loan modification.
Answer Submitted on Thu, Apr 2 2009
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