If you have a mortgage and you are finding yourself in financial difficulty there are quite a few solutions available to you. So many in fact, that you may feel somewhat overwhelmed by all the different options. Golden State Financial Group wants to highlight two options in particular. Those are the loan modification and the short sale.
Understanding Home Loan Modification According to the Golden State Financial Group
With a home loan modification, you speak to your lender and enter into new negotiations to change the terms and conditions of your mortgage. Effectively, you will change what you pay, how much you pay, how often you pay, or how long you pay it for. The lender will look at your current abilities and inabilities to make payments and they will change the terms of your monthly payments accordingly. One way to achieve this is by having any payments that you have missed to the end of your loan, by reducing the interest rate you pay, or how long your mortgage runs for.
The Difference between Home Loan Modification and Short Sale
When you agree to a home loan modification, you effectively start a new contract between yourself and your lender. Overall however comma the deal will be mainly in your favour. Essentially, the lender will agree to make your mortgage more affordable, sometimes going as far as lowering the overall balance owed. Indeed, it is not unheard of for people to save tens of thousands of Dollars on their property.
The other end of the spectrum is the short sale. What this means is that the bank will agree to take over the home for only a fraction of the money still owed on it. This is generally in the lender favor, but because they do work together with the homeowner, they often make things reasonably easy. For instance, they may agree to a shorter refinance so that the family can remain in the property until they find elsewhere to live.
If you find yourself in a situation where you were considering a home loan modification or a short sale, it is recommended that you speak to an expert like the Golden State Financial Group first. Many people are still suffering as a consequence of the great recession of 2008, or even from the unfair mortgage practices that came before that. For instance comma it is possible that your appraisal was inflated or even falsified in an effort to increase the profits of your lender. This is one of the main things that contributed to the housing crisis in first place. A good financial professional will look at all the available options, including loss mitigation. This is an option whereby the blame for the situation is placed fully on the lender. Some financial professionals feel this is a necessary action as it forces lenders to admit the role they played in financial meltdown. The most important thing is that you get help, however.