If you have missed your monthly mortgage payments for the last few months and you fear that your lender is eying your home, it is better you convey your financial hardship to your lender. If you do so, your lender may be willing to help you catch up with your mortgage payments by suggesting appropriate methods. There are 2 ways in which you can save your home from foreclosure.

One is mortgage refinancing and the other method is loan modification. Talk to your lender and give him enough evidence that you are facing financial hardship. Let him know the reasons for which you are not being able to pay your monthly mortgage payments.

What happens if you refinance your mortgage?

When you refinance your mortgage, you take out another loan that will pay off your earlier loan. You will be using the same collateral. The main advantage is you will be able to enjoy better rates and terms on your mortgage loan. If you are opting for mortgage refinance you will have to shell out fees like escrow fees, appraiser fees, lender fees, taxes, title fees etc. You need to have a fairly good credit rating and have equity in your property. Your income should be able to support the monthly mortgage payments.

You can also avail some extra cash in case you have some equity left in your property. This is usually referred to as cash out refinancing. Proceeds of cash out refinancing can help you to pay off your other debts.

How can loan modification help you?

Loan modification is when the existing terms of your mortgage are modified so that your monthly mortgage payments are affordable and you are in a position to repay the loan. Lender will modify your mortgage by increasing the loan term, fixing the interest rate from adjustable-rate mortgage or by reducing the principal balance of the loan. However, you will have to give documentary evidence that you are facing financial hardship. Loan modification also referred to as mortgage modification will not take your credit score into account.

In case you are having doubts about irregularities existing in the terms of your mortgage loan, you can always opt for forensic loan audit. A forensic loan audit report will help you to find out the anomalies that exist in the terms of your mortgage.