Prevent Foreclosures – Benefits of Short Sale Over Mortgage Modification – Cars Modification

Did you get caught in the sub prime mortgages? Are you facing significant hardship and unable to make your mortgage payments? Well, you are not alone. Millions of homeowners are faced with this exact situation and just don’t know what to do. There are options for you to consider remedying the situation but which one is for you. It is complicated and homeowners more likely not familiar with the process can be an intimidating and frustrating process. So let’s dispel the options and the advantages.What is Loan Modification?
Loan modification is the restructuring of your mortgage to lower the payments, interest rate and the length of time or term of the mortgage i.e. 30 years or 40 years of mortgage. Loan modification can sometimes be difficult to get approved, as the originating lending bank must be track down. How is this difficult? In the financial markets, loans are used like a stock or bond and traded in the marketplace.A loan can get traded, sold and resold many time to different buyers (lenders) like any other investor. It may be time consuming and difficult to find this investor to get approval for the loan to be modified, as much as two or three months. Meanwhile, you still have to make the payments on the mortgage and the acceptance of the modification is not guaranteed. This option is not the same as refinancing your mortgage. You will not be able to take our any equity from your home if needed.If you do not have a steady flow of income to satisfy the requirements needed for a loan modification, you should consider another option such a short sale option. This is a better solution especially if your credit is severely damaged and your payments are still very high meaning the regular mortgage payments plus any amounts that have been missed. As in many cases, the property is worth less than the amount you owe. Just like buying a car, your home is depreciating instead of increasing in value.Consider A Short Sale:
This is where a short sale is a good option. In this situation, the bank agrees to take less than what you owe on the mortgage in exchange for a quick sale of the property. In this way, the debt you owe is paid off at the closing of the sale of the property. The benefit is that you settle your entire mortgage at the price you sell the property and you avoid foreclosure costs and headaches.Although you give up your home, you gain minimal damage to your credit rating so you can buy another home in the future, and you gain immediate peace of mind that you no longer have to make those high payments that is draining your savings and retirement funds. With this option, most people recover with 18 months on average. You will be in a much better position financially in the short term and re-establish yourself in the long term.