{"id":4399,"date":"2024-12-04T16:33:54","date_gmt":"2024-12-04T21:33:54","guid":{"rendered":"https:\/\/tomo.com\/blog\/?p=4399"},"modified":"2026-05-15T10:57:27","modified_gmt":"2026-05-15T15:57:27","slug":"mortgage-modification-vs-refinancing-whats-the-difference","status":"publish","type":"post","link":"https:\/\/tomo.com\/blog\/mortgage-modification-vs-refinancing-whats-the-difference\/","title":{"rendered":"Mortgage modification vs. refinancing: what\u2019s the difference?"},"content":{"rendered":"\n

If you\u2019re thinking about changing up your mortgage<\/a>\u2014great, you’re in the right place! But before you dive in, let\u2019s clear up the confusion between mortgage modification and refinancing<\/a>. They might sound similar, but they\u2019re totally different beasts. Let’s take a look at both side by side. <\/p>\n\n\n\n

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See today’s rates<\/a><\/div>\n<\/div>\n\n\n\n
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Mortgage Modification<\/h3>\n\n\n\n

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Feature<\/strong><\/th>Mortgage Modification<\/strong><\/th>Refinancing<\/strong><\/th><\/tr><\/thead>
What It Is<\/strong><\/td>A rescue plan for your existing mortgage, designed for struggling homeowners needing breathing room.<\/td>A brand-new loan replacing your current one, aimed at taking advantage of better rates<\/a> or terms.<\/td><\/tr>
How It Works<\/strong><\/td>Negotiates new terms (e.g., lower interest rate, longer term, or changes to principal balance) on your current mortgage.<\/td>Requires applying for a new mortgage that pays off the old one, often with new interest rates and terms.<\/td><\/tr>
Who It\u2019s For<\/strong><\/td>Homeowners facing financial hardship, such as job loss or medical bills, to avoid foreclosure<\/a>.<\/td>Homeowners looking to save money on payments, access equity, or switch from an ARM to a fixed-rate mortgage.<\/a><\/td><\/tr>
Impact on Credit<\/strong><\/td>A mortgage modification will most likely have a 30-100 point hit on your credit score (temporarily) but it will be less harmful than foreclosure.<\/td>Minor impact on your credit score from a hard inquiry<\/a>; can save money long-term if better rates are secured.<\/td><\/tr>
Closing Costs<\/strong><\/td>Typically, no closing costs, though some lenders may charge fees.<\/td>Usually involves closing costs, <\/a>which should be weighed against potential savings.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

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To sum it up <\/h2>\n\n\n\n

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Mortgage modification is your go-to for relief during tough times, while refinancing is about optimizing your mortgage for better terms and rates.<\/p>\n\n\n\n

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If you\u2019re in a bind and need to lower your payments, modification is the way to go. But if you\u2019re looking to save some cash or improve your loan terms, refinancing might be the smarter choice.<\/p>\n\n\n\n

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See today’s interest rates<\/a><\/div>\n<\/div>\n\n\n\n

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Jacob Hayes<\/a><\/p>

Jacob Hayes is a Team Lead and Senior Loan Advisor at Tomo Mortgage, dedicated to helping clients navigate the home financing process. With deep expertise in loan products and offerings, Jacob serves as both a trusted advisor and a customer advocate, ensuring clients understand their options and make informed decisions.<\/p><\/div><\/div>\n\n\n

If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

If you\u2019re thinking about changing up your mortgage\u2014great, you’re in the right place! But before you dive in, let\u2019s clear up the confusion between mortgage modification and refinancing. They might sound similar, but they\u2019re totally different beasts. Let’s take a look at both side by side. Mortgage Modification Feature Mortgage Modification Refinancing What It Is […]<\/p>\n","protected":false},"author":33,"featured_media":3807,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"fifu_image_url":"","fifu_image_alt":"","_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[38],"tags":[],"class_list":["post-4399","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mortgage-dictionary"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t