We wanted to take some time to talk with you regarding loan mods. One of the more common questions we hear from property owners is “What should we do concerning our home?” The home owners don’t want to leave their homes. However, they are either late on their payments or upsidedown with their mortgage. They typically think about doing a loan mod.
We merely want to let you know that the government and the media talk regarding loan mods regularly. Nonetheless, they aren’t nearly as helpful as the gov’t or media would have you believe. There are some good loan mods that occur. Still, less than one in ten actually get approved. Some of you watching this may have already found this out by applying for a loan modification yourselves.
You should know that there are two types of loan modifications, principal reduction and change to rate or payment. A principal reduction is nearly non-existing. Maybe one in 500 get approved. The principal reduction is where the bank says that your mortgage is worth $200,000, but your residence is worth $150,000. So the bank redoes your loan for $150,000. Nevertheless, be aware 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 occur, they are decent temporary fixes. Yet, most people learn that there comes a certain time when they decide to default it. It still does not address the fact that your residence is not worth the value of your loan. We aren’t saying that the loan modification decision is not for you. However, most people typically end up going to the short sale method. The short sale enables you to get a new start and meet the criteria to buy a residence in as little as two years.
Most people comprehend that the loan modification didn’t help them after the first couple months. We would love to have the opportunity to talk with you. A short sale is the best alternative for most house owners looking for aid.
Get more information on selling your home from Kevin and Fred at My First Short Sale by the Short Sale Specialists of Arizona