Do you need a loan modification? Are you struggling to make your monthly mortgage payment? Have you searched the internet looking for a way to save yourself from foreclosure? In this article we are going to discuss what loan modifications are and how they just might be the answer to the questions above.
We are going to talk about what loan modifications are, what some of the other options are and why a loan modification might be the best option for you! Loan modifications are simply, any changes made to an already existing loan on a house, condo, duplex and/or etc.
These changes can range from simply lowering the interest rate to completely changing the original loan to help you stay in your home.
Loan modifications aren't new at all and they are rapidly becoming the preferred method of avoiding foreclosures.
They have been around for quite awhile.
Most people just don't know that they are able to contact their lender to request that their loan be modified.
Loan modifications are a great way to keep your home and also get more favorable terms to help keep you in your home.
The greatest part about loan modifications is that they are a very cost effective solution for both the Borrower and the Lender.
It is important to keep in mind, that they are not refinances so they are available to everyone regardless of your past credit history or the amount of equity you have in your home.
Loan Modifications vs.
Short Sales Another option offered to homeowners who do not have the financial means to pay their mortgages is called a short sale.
A short sale is just like it sounds.
It is selling your home for well below the amount of the original mortgage loan.
Doing a short sale can be a huge life saver to those who are stressed out about their inability to make their mortgage payments.
Short sales can be very complex, time consuming and they can require a lot of patience.
As you have probably already guessed, short sales don't allow you to keep your home.
This is the biggest difference between short sales and loan modifications.
The downside to short sales is that you will still end up being upside down on your home mortgage loan but it will help you avoid having a foreclosure on your credit.
In my honest opinion, short sales should only be used as a last ditch effort.
You should try all other options before settling on a short sale.
Forbearance vs.
Loan Modifications As with any other option, forbearances are a way to help relieve some of the stress related to making your mortgage payment after job loss or illness.
A forbearance is a temporary solution.
It is normally offered as a way to help a homeowner who is facing a temporary crisis.
Illnesses, temporary layoffs or family emergencies are some of the reasons why a forbearance would be appropriate to avoid foreclosure.
Forbearances should not be confused with temporary loan modifications.
They are completely different because temporary loan modifications would still require you to make your monthly mortgage payment which hopefully would be lower and more affordable than the normal amount.
Forbearances, generally allow you to not have to make your payment for a predetermined amount of time.
This hopefully would help you through the temporary crisis you were experiencing.
As you can see, loan modifications are certainly a solution to the questions we asked at the beginning of this article.
They have tons of upsides and can be a great way to avoid letting your house go into foreclosure.
Loan modifications can be done the homeowners and given enough time, patience and endurance can be a great cost saver.
In most cases, I suggest trying it on your own.
If you are denied or get frustrated with the process then I suggest your hire a professional.
There are several companies around that offer loan modification services.
Doing a search in any search engine will give you a lot of choices.
Be sure to pick the one you feel comfortable with performing your loan modifications.