Bank has offered without solicitation to modify my homeloan which is now variable and floating. They offered to modify at 5%. Would I be better off refinancing? Should this be doen via another institution?

Carlos, I assume your floating rate is tied to the 1 year Libor and should be about 3.25%. To answer your questions is it depends how long you plan on staying in the property and if your income allows you to refinance and there is equity in the home. Assuming there is no equity in the home or your income is keeping you from doing a refinance the 5.00% offer isn't bad but not great. Currently 30 year fixed loans for a refinance are 4.625%.

My guess is they are just using the word "modify" because they know you like that word. I don't believe they are doing a modification. They are probably just refinancing you and using the overage on the rate to cover your costs. Yes, you are typically going to get a better deal by using someone other than your current lender. <a href="http://www.fernbankmortgage.com">Georgia Mortgage</a>