If you are considering getting a loan modification on you home, make sure you weigh your options and think things through before you make any final decisions. Here are some facts you should know.
1. Only 35% of Loan Modification attempts are successful.
2. Less than 1 in 20 Loan Modifications reduce the principal balance.
3. By accepting a loan modification, you are agreeing to a mortgage that is still “under water” and a second attempt at a modification will most likely be denied.
4. Due to fact that most modification will not reduce the principal balance, this means that you are facing a good 10-15 years in home before seeing equity again. If the time arises before you have equity, you may find yourself selling your home as a short sale, even after most of the market has recovered.
5. By applying for a loan modification before a short sale, remember that the numbers for your income, payments, etc are being stored by your lender so it will not be easy to change your mind and apply for a short sale.
6. By selling your home as a short sale as opposed to modifying your home mortgage, you will be able to buy a home much nicer than the one you are in right now within 2-3 years while prices are still nice and low.
7. Many banks make it a requirement for you to be delinquent on your house payment in order to qualify for a modification, a risk that serious consequences.
8. Companies or professional offering to modify your loan for you with upfront fees are not following the law, It is illegal to charge an upfront fee.
9. Companies or professionals telling yo to pay them instead of your lender are breaking the law.
10. In most modification, your payment will slowly increase each year, offering only a temporary fix to your financial burdens.
