Your lender wants you to apply for a loan modification. But is it a smart choice?
A lot of my short sale clients have either considered a mortgage modification or been turned down for one by the time they have made the decision to move forward with a short sale.
WHAT IS A LOAN MODIFICATION?
In a mortgage modification the lender makes permanent changes to the terms of your home loan resulting in a more affordable payment. Keep in mind that while a modification will reduce your payment, it will not reduce the amount you owe on the property. In fact, in many instances the amount you owe on the loan will actually greatly increase the amount or length of your loan, especially if you have a HUD partial claim.
This is the main reason most mortgage modifications ultimately fail. Loan modifications are not a long term solution for anyone who owes more on their home than their home could sell for (owners with negative equity).
IS A LOAN MODIFICATION RIGHT FOR YOU?
A loan mod may be a good choice if you:
A loan mod may not be a good cHoice if you:
A better alternative in tHESE situationS is almost always a short sale.
I want to thank you again for taking care of everything, I received stacks of letters from the two mortgage companies with threats and pleads for me to contact them and I ignored it and left everything in your worthy hands. The other realtor at the closing said that he was worried because usually short sales don't work out, and that this is his first successful one. I told him that I found you on google and I was told that you are the best in the state for short sales, and that you proved that to be true. A huge burden has definitely been lifted and all of the credit goes to you. Thanks again!
D.B.
Last Updated on June 6, 2023 by Minna Reid