Can a homeowner in mortgage default refinance to stop foreclosure rather than mortgage loan modification? In most cases, absolutely! The next brief summary of what’s required to successfully pursue this alternative should provide you with a good general idea of which option–refinancing or loan modification–is best for you.

The very first factor involved in being able to refinance your house before it’s foreclosed upon is having equity in your home. Which means that you have to owe less money in your mortgage than the house is currently worth. In order to refinance to stop foreclosure instead of loan modification, you’ll usually need at least 10% equity in the home. If you have under that, or haven’t any equity in your home at all, then automatically loan modification becomes your more sensible choice.

Another thing you have to refinance to stop foreclosure rather than loan modification is decent credit (or at least it will help greatly). While refinancing mortgage programs do indeed exists for people with bad credit, they are usually costly options that only get people into bigger problems than that which they were already looking to get out of. Refinance loans for people with bad credit are also less and farther between than they once were.

It’s also important to keep in mind that if you’re already in foreclosure, then chances are your credit has already been affected. Refinancing is usually most successful when you’re only 1-3 months behind in your payments, because that information may not have shown up on all your credit reports just yet. If you have a bad credit score, however, then you’ll probably have an easier time stopping foreclosure using mortgage loan modification.

Everything having been said, despite relatively decent credit along with a sizable amount of equity in your house, lenders are often reluctant to grant refinance loans to individuals in foreclosure because they’ve already shown themselves to be default risks. Because of this, even if you are able to refinance to stop foreclosure instead of loan modification, the the refinance might be so undesirable how the mortgage loan modification still may be your better option.

NOTE: By researching and comparing the best stop foreclosure loans companies in the market, you will determine the one that meets your very specific financial situation.

You are very welcome to visit the Stop Foreclosure Loans website – where you can review the best resources to stop foreclosure.