In today's economic real estate market, unfortunately, sellers frequently find themselves in a position where their home must be sold for less than the outstanding balance of their mortgage. The process in doing so is called a "short sale," where the lender-or more specifically the investor(s) or lienholder(s),-are asked to accept a less-than-full payoff for the property.
Two alternatives are suggested here that can and should be examined prior to deciding to pursue a short sale. Over the next few posts, I'll link to other alternatives.
For a more complete discussion, click the title.
Should You Refinance Your Home? If you feel you have sufficient income to continue making payments on your home, but need to lower the payments, one of the best choices - providing current interest rates are justifiably less than your existing rate - is to refinance the home. By refinancing, you may be able to remain with your existing lender, or perhaps take advantage of better terms offered by another.
Does a Loan Modification Make Sense? A loan modification is a process where your current lender changes the terms or length of your current mortgage, or perhaps even reduces the amount of your loan so that your indebtedness and payment fall within current guidelines. Unfortunately as of this time, it appears that most loan modifications are unsuccessful, with something less than 5% of all applicants successfully completing the loan modification program being reported by some analysts.
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