Should I Modify My Loan or Short Sale My Home?

March 26, 2009 at 2:51 pm Leave a comment

Many people are facing a tough decision about whether to modify their loan or list their home as a short sale. To find out what is the most suitable option for you, begin by answering these questions.

* Do you want to keep the house? If you want to keep the house, loan modification is a better option for you than a short sale. If you do not want to keep the house, then short selling the house is a logical option for you.

* If you plan to keep the house, how long do you plan to stay in it and make mortgage payments? If your answer is “less than five years,” you might end up short selling the house two to three years from now because you could still be upside down on your house unless the real estate market makes a surge in appreciation.

Some homeowners are deliberately skipping payments to get quicker attention from their lender. If you are looking to modify your loan and have missed payments, hold on to the savings you’ve collected from missed payments because your lender may ask you to pay all your back payments. Loan modification does not mean that your missed payments are erased. You are merely postponing payment of your late obligations. You will have to pay them sometime during the life of the loan.

There are many loan modification outfits that are claiming a high success rate for their services. They charge a fee to start a modification of your loan. Be certain that the company you choose is legitimate and offers a guarantee on their work. You can also do the loan modification application yourself, but this is typically unsuccessful because homeowners usually do not have the knowledge or the time needed to negotiate a modification with their lender.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , .

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