Many people are just starting to hear the term “loan modification” and wondering if it is a viable option to get into a better loan program. At the same time, many people who are in FHA loans are wondering if the FHA streamline refinance program will help them lower their interest rates and monthly mortgage payment.
Which is better – a loan modification or the FHA streamline refinance?
Each situation is a little bit different, but in general, I would say that it mostly depends on two things:
- Are you currently late on your mortgage payments
- Do you currently owe a *significant* amount of money more than what your house is worth
If you are currently late on your payments, loan modification is better. If you owe *significantly* more than your house is worth, loan modification is better.
First, in order to participate in the FHA streamline refinance program, you can’t have more than two 30 day late payments on your mortgage in the last 12 months. AND you must be current on your mortgage payments. So if you are currently late on your mortgage payments, loan modification is a better option.
Second, if you owe significantly more money on your home than it is now worth, one of the two best ways to get a loan amount that is 95% of what the current value on your home is, is to go through the loan modification process.
For questions about the FHA streamline refinance program, make sure you speak with a FHA streamline refinance expert. Or, find a list of loan modification companies who can help you possibly get your loan modified.
The FHA streamline refinance program or a loan modification… which is better?