Loan Modifications Not Worth The Excitement
We wanted to take some time to speak with you concerning loan mods. One of the more popular questions we hear from home owners is “What should we do regarding our house?” The home owners don’t want to leave their homes. Still, they are either behind on their payments or upsidedown with their mortgage. They typically think about doing a loan modification.
We only want to let you know that the government and the media talk concerning loan mods often. However, they aren’t nearly as useful as the gov’t or media would have you think. There are some good loan mods that occur. Nevertheless, less than one in ten actually get approved. Some of you watching this may have already found this out by applying for a loan mod yourselves.
You should know that there are two kinds of loan mods, principal reduction and change to rate or payment. A principal reduction is nearly non-existent. Maybe one in 500 get approved. The principal reduction is where the lender says that your mortgage is worth $200,000, but your residence is worth $150,000. So the bank redoes your mortgage for $150,000. Yet, be conscious that if you get a principal reduction you are liable for the taxes on that $50,000 gift from the bank.
Payment reductions are seen sporadically. When they happen, they are good temporary fixes. Nonetheless, most people learn that there comes a certain time when they choose to default it. It still doesn’t address the fact that your residence is not worth the value of your loan. We are not saying that the loan modification decision is not for you. However, most people usually end up going to the short sale procedure. The short sale enables you to get a fresh start and qualify to buy a home in as little as two years.
Most people understand that the loan mod didn’t help them after the first few months. We would love to have the opportunity to talk with you. A short sale is the best choice for most property owners looking for help.
Get more information on selling your home from Kevin and Fred at My First Short Sale by the Short Sale Specialists of Arizona
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