difference between a mortgage refinance and a mortgage modification

[David Devis]

A mortgage refinance normally requires a complete re-qualification for the new loan under current mortgage guidelines. The re-qualification could also require a new appraisal of your home. Many real estate markets are considered “declining markets” by most lenders and your home may not appraise high enough to qualify for a new loan. Additionally, since a refinance is a completely new recorded loan there are additional costs associated with the appraisal, title work, subordination fees for second mortgages (HELOC), government taxes and recording fees (these vary state to state) and lender fees.

A mortgage modification is a change to the original mortgage loan instrument. In most cases, a new appraisal is not required and a new re-qualification is not required (this may vary depending on your Servicer’s requirements). Since this change is only to the original recorded document, title fees, subordination agreements, and recording fees may not be required; which can potentially save you thousands of dollars.

[hardikvagadiya@gmail.com]

mortgage refinance:-

Refinancing refers to the replacement of an existing debt obligation with a debt obligation bearing different terms. ...

mortgage modification:-

Mortgage modification is a process where the terms of a mortgage are modified outside the original terms of the contract agreed to by the lender ...

this is the major difference between modification and refinance.