Refinance Your Home Or Reorganize In A Chapter 13?


With mortgage interest rates record lows, many homeowners are scrambling to lock in savings by refinancing. In addition, according to some data, nearly 2.2 million homeowners have refinanced a mortgage at least twice since 2009.

Some borrowers are being enticed by lenders offering to waive some or all of the closing costs associated with a refinance. Regrettably, these deals are commonly too good to be true.

Mortgage lenders and financial institutions like banks and credit unions are in the business of making money, not making consumers’ lives easier. Like everyone else they want turn a profit.

A lender may claim to waive closing costs or other fees, but what really do is either roll them into the loan itself or paid for via a higher interest rate, or some combination of both. When you refinance, you’re taking out a whole new mortgage. That means fees for escrow, title searches, inspections, document preparation fees, administration, title policies, recording, etc. Add yet another refinance down the road, and your costs will double.

Homeowners who refinance can end up with a bigger loans longer term. Many times this just doesn’t make much sense. Most homeowners that may be seeking to refinance, are doing so in hopes of lowering their monthly mortgage payment. But, if you’ve been struggling to stay current on your mortgage, it’s unlikely that you’ll be able to qualify for a rate that makes a refinance worthwhile.

So, you might think that a loan modification might make a bit more sense for those that are sporting a poor credit score. It makes sense, but unfortunately, lenders have little motivation to perform adjustments, even when pushed by government programs like the Home Affordable Modification Program (HAMP), because know they can charge more fees and late penalties when families are facing cash flow difficulties.

What creditors do not tell you is that even if you are able to refinance or modify your mortgage, you may still lose your home in the end. Refinances and modifications usually will not work for most people because they don’t address the real problem: non-mortgage debt.

Most people have trouble making payments because they are drowning in high-interest credit card debt, or are being sued for overdue medical bills. A Chapter 13 bankruptcy has the power to not only legally stop foreclosure, but to eliminate the most pressing forms of debt – from credit cards to unpaid medical bills. With your credit card debt gone, you may be surprised at how quickly your mortgage payment becomes affordable.

And, while lenders may claim bankruptcy will hurt your credit score, in most cases it actually paves the way for you to clean up your score by allowing your family to finally become debt-free.

Chapter 13 lets homeowners reorganize all their debts, not just their home loan.

If you or your family needs to get out from a mountain of debt or protect you and your family’s future, you need to speak with an experienced, empathetic, and knowledgeable attorney like the ones at Chris Wesner Law Office, LLC. Give us a call to set up an in person or telephone conference for FREE. That’s right, FREE. Our initial consultation is 100% FREE, with NO STRINGS attached. There is NO FEE if you decide that bankruptcy is not for you. In fact, we OFTEN encourage our clients NOT to file bankruptcy.

Chris Wesner Law Office, LLC has offices throughout the Miami Valley including: Dayton, Xenia, Springfield, Troy, and Piqua with other offices expected to be coming soon like Sidney and Hamilton.

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