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If you are trying to decide whether to refinance or modify your mortgage, it is important to understand how each option works. Many homeowners are surprised to learn that they can modify their mortgage even when they are current on their payments. It isn’t a common occurrence, but modifications (also called “recasts”) of current mortgages have been available for years.

What is the benefit of modifying your mortgage? Typically you can obtain a lower interest rate. This can be significant if you have an adjustable rate mortgage and you modify your loan to include a fixed interest rate, especially if you are not required to make a principal payment or undergo new underwriting requirements.

Not all loans qualify to be recast, but below are a few of the primary differences between refinancing and modifying your loan:

· The refinance of your loan requires an appraisal as well as escrow and title work, while a loan modification typically does not require either.

· A credit hold is often important in refinancing a loan, but not in modifications.

· You can typically obtain a lower interest rate in a loan modification, but refinanced loans are subject to the current market rate.

· The time required to refinance a loan is typically less than the time it takes to complete a loan modification.

There are many other differences between refinancing and modifying a loan, so it is important to confer with a knowledgeable attorney to determine which option is more beneficial for you. Factors that must be considered include the value of your home, your credit score and your unique financial situation.

If you would like to make your home more affordable, now is the time to schedule a free initial consultation with a New Jersey loan modification lawyer at Levitt & Slafkes, P.C. Contact our attorneys online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation.