Considerations Before Refinancing Mortgage

In today's Chicago Tribune Ilyce Glink details very helpful steps for existing homeowners who consider refinancing their mortgages.

In general, "it's important to know the current value of your home, your current mortgage loan interest rate, and your credit history and score. You should also run the numbers to see whether you can recoup your closing costs in a reasonable amount of time," writes Glink.

He gives the following tips before refinancing your mortgage.

• Find out how much your home is really worth.

• If you're underwater with your mortgage, assess how far underwater you are.

• Get a copy of your credit history and credit score.

• Start identifying potential lenders.

• Find out if your second lender will subordinate to your first lender.

• Focus on the big picture, not just the interest rate.

• Get your paperwork together ahead of time.

Consider Federal Loan Modification Plan. That may be a good place to start when considering mortgage refinance. The federal government's loan modification will prevent foreclosure from happening and it will save you from a terrible experience. You will have to demonstrate your financial difficulties to the lender and the best way to do that is to include a well-written letter in the application. The lender will agree to new terms, even if you have missed one or even several payments.