Over the last several years many of our South Florida readers have probably seen their mailboxes inundated with mailers regarding prime opportunities to refinance their mortgage. Indeed, millions of Americans have in fact taken advantage of the low interest rates that have been prevalent for the last few years, refinancing their mortgages to a lower interest rate. But, what about those Florida residents who are facing a potential foreclosure action due to their troubles with simply making their monthly mortgage payments? Can refinancing a mortgage stave off a foreclosure action?
The fact is, for homeowners who are in a financial situation where a foreclosure action may become a reality, a traditional refinancing option may not exist. Refinancing is generally reserved for homeowners who have fairly good credit and people who are facing foreclosure are more likely to see their credit score take a nosedive, probably because they have problems with other loans or credit cards in addition to the mortgage.
Even for those who do qualify to refinance their mortgage, this is not a simple process. Refinancing can involve almost the same amount of effort that was needed to secure a mortgage in the first place: shopping around for the best rate, submitting documentation regarding credit and income and determining the value of the home.
If a South Florida resident is facing a foreclosure action and finds that it is too late to refinance, there may be other options. A mortgage loan modification could see at least temporary relief for a homeowner who is suddenly in a precarious financial position. Any homeowner in this type of situation may want to get more information on how to go about negotiating with lenders.
Source: FindLaw, “Refinancing Do’s and Don’ts,” Accessed Oct. 31, 2015