Loan Modification or Short Sale.
Published On: January 21, 2011 Posted by: TownsRealty
If you are a homeowner and you are faced with a financial hardship whether you lost your job, got a salary cut, less hours at your job or you have to relocate to find a job, the question of how to make ends meet to pay your mortgage comes to your mind.
A lot of homeowners bought their homes at a high value in 2005 thru 2007. Mortgages were given out to new homeowners with a low, adjustable rate and a low mortgage payment because of that.
When the adjustable rate period ended after a couple of years, the homeowners were hit with a high mortgage payment, in some cases their mortgage payment was double their original mortgage payment. That put the homeowners in an unsettling situation where they had a job but couldn’t afford a high mortgage.
Some homeowners have tried loan modifications. A Loan Modification is a permanent change in one or more of the terms of a mortgagor’s loan, allows the loan to be reinstated, and results in a payment the mortgagor (homeowner) can afford. Loan modification can be done by working with your lender. To qualify for a loan modification, you have to provide to your lender a lot of your financial information in order for them to determine if it is in their best interest to modify your mortgage payment, and that you will be able to pay the new amount.
If a loan modification does not work then the short sale option is next. When choosing to do a short sale make sure you choose a Realtor® who is experienced in short sales. Please keep in mind that all costs involved in a short sale will be paid by your lender.