Loan modification or refinance?

3 Replies

Hi BP!

I own a 4plex that is currently coming out of forbearance, and need some advice on next steps. I've been offered a loan mod/partial claim by the mortgage company, but there is more than 20% equity in the property and would it be a better idea to just refinance? If anyone knows a mortgage broker or lender that can provide some advice, that would be so helpful. 


Does it serve as your primary residence?  Personally I'd opt for a refinance as long as your new loan doesn't place you into a difficult financial position each month. The equity you've built in the property gives you options and flexibility.  Refinancing will also possibly lower your a payment but could also reset your amortization schedule.  A loan mod could potentially increase the interest paid over time and slow your amortization down and the rate at which you reduce your principal loan balance.  Depends on the agreement offered.  Good luck.  

Hello @Josephine Breign

My advice to you is that the real estate market is headed into a major correction soon. This means you do not want to buy anything to hold because you are at the top of the market. Almost anything you buy will fall in value based on the market correction. Let me know if you need any help.


Update, I went with the Loan Mod because the terms were really good (low interest rate, low monthly payments). I'm also free to refinance after 3 mortgage payments, which is what I'm looking into doing right now because rates are still low. 

@David Ginn To your point, my original post didn't mention buying anything, but I appreciate the perspective. I'm looking to cash-out refinance to buy another property, maybe to airbnb. NC has some promising areas, but it does seem like things are really expensive at the moment.