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When you take out a mortgage you and also the lender are required to agree to some terms and conditions in regards to the home loan. Now, if you fail to stick to the terms and conditions of the home loan and the payments, the lender can foreclose your home. For example, if you default on the loan or if you are not even able to make the minimum payments, the lender can take away your home and sell it off. This is the way in which he can recover his money. In such a situation mortgage refinancing or loan modification can help in saving your home.

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Which is the better option?

Now, you will have to decide as to which is the better option – loan modification or mortgage refinancing. Loan modification and mortgage refinancing; both changes the terms and conditions of your home loan. These helps in lowering the interest rate on your debt and also helps in extending the loan term so that the amount you are required to pay in installments against the loan gets reduced.

But, the main difference between the two is that in case of loan modification the terms and conditions of the same loan gets changed and in case of refinancing, you are required to take on another home loan with low interest rate and longer loan term in comparison to the previous home loan that you had taken to finance your home.

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So, in case of refinancing, you are actually adding up your debt though it helps you in retaining your home. Thus, it would be much better for you to first try out the loan modification with the lender and if this does not work out for you, you can try out mortgage refinancing in order to save your home.

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In fact, refining will take your time and energy as you are required to take out a new mortgage. And in case of loan modification, you are not required to pay any extra costs for the home loan. You are not required to go through the process of loan approval and the applications and all. But still, it cannot be denied that refinancing helps you in saving your home from getting foreclosed in case your previous lender does not agree to your loan modification request. Refinancing thus, can be your last resort to save your home from the clutches of your lender. Please visit http://www.mortgagefit.com/refinance.html for more details.