Many times each day, I am asked the question of “does it make more sense to refinance my current loan or do a loan modification?
If you are currently in a conventional loan and owe more than your house is worth, your refinance options don’t exist if you owe more than your house is worth. You are pretty much stuck in the loan program that you are currently in and can’t take advantage of lower interest rates to get a lower payment.
If you are in this situation, loan modification probably makes the most sense.
When choosing a loan modification company to work with, realize that each loan modification company is different – even though they functionally all try to accomplish the same task – to “modify the terms of your loan” and hopefully leave you in a better position than what you started with.
Each loan modification company has their own process. Each loan modification company charges different fees. Each loan modification company has different success rates. Each loan modification company will probably tell you that they are the “best in the business”.
How do you pick one?
If it were me, I would probably choose a loan modification with no up front fees and a success fee only if they are successful in modifying the terms of your loan. Do they exist? Yes. But you have to know where to look!