If you pay any attention to mortgage rates then you should know that the current rate for a 30 year mortgage is under 5 percent.  Refinancing is looking pretty good right about now, but for many their credit score is getting in the way of lowering their monthly payments.

The current economic crisis is putting a hurt on a lot of pocketbooks, making it difficult to make their monthly mortgage payments.  For those with good credit refinancing is probably the answer, but those of you that have less than desirable or just plain bad credit you need another plan.

That’s where loan modification can come into play for you.

Loan modification is an adjustment to your existing loan that usually results in lower monthly payments for you, the borrower.  Lenders do not want you to fall so far behind that they have to foreclose on your house.  they want you paying your monthly note.  That is why most lenders will work with you in hard times to modify your loan, making it a win win for both parties – you keep your home and the lender doesn’t have to deal with selling your property for a loss.

Loan modification is not as quick of a process as refinancing is.  In fact, you may run into a brick wall when you talk to customer service about it.  If that is the case, then you should ask to speak with your lender’s loss mitigation department.  They will go over your options.

Loan modification involves some negotiating.  You should do as much research as you can before even starting the conversation with your lender.  There are many firms that advertise loan modification services.  Read their websites and call their offices to see what advice they can give you.  Most will answer your questions without having to pay a dime.

If you get to the point where you cannot get your bank to budge, then it is time to call on one of these firms to negotiate for you.

Remember, foreclosure stings for years to come.  If you feel that you will be falling behind in your mortgage, be sure and let the bank know right away.  Things will go much smoother for you if you keep the communication open.