Should I short sale my Elk Grove home or do a loan modification?

Should I short sale my Elk Grove home or do a loan modification?

Every homeowners instinct is usually to try and save their home from foreclosure.

They try everything they can to save their home. Borrowing money from family, racking up credit card debt, renting a room, or getting another job.

Many of my clients look to a loan modification as a way to save the day their home. Did you know that over 90% of loan modifications fail?

Believe me... I wish this would solve the problem for my client. Although I make my living assisting people negotiate a short sale with their bank... At the end of the day I have a huge heart and I want to see these homeowners save their home.

Unfortunately, sometimes there are no options for the homeowner to avoid having to move. Many look to a loan modification to save the day.

So why don't loan modifications work?

The biggest reason ---------> Homeowners accept unaffordable loan modification terms!

I hear it all the time... It's OK Erin... We were able to negotiate a loan modification and they gave us a 2% interest rate. Wow! That seems like the problem is solved and we can all go about our business. BUT then I ask the client... So for how long is that reduced interest rate good for? The answer I hear most often is 2 years. Well... How is that going to solve your problem? What happens in 2 years when your loan terms convert to your previous terms? Sounds like you will be right back where you are now???

I think the homeowner hears the 2% and they jump for joy that they get to stay in their home.... Well for now.

No one wants to loose their home... No one wants to move... No one wants a foreclosure hanging over their head... No one wants to tell their family, friends, and neighbors that there may be a problem.

The idea that they can quietly renegotiate their loan terms must seem like a dream come true. BUT is it? Or are they just putting off the inevitable?

Keep in mind that most loan modification result in a higher loan balance to the homeowner too!

If you are behind on your payment, there are past due payments and fees that are stacking up. When you do a loan modification, these back payments are usually tacked to your loan balance. If you have a mortgage balance of $300,000 and you are $10,000 behind in payments and fees... Your new loan balance will be $310,000.

So they're adding to your loan balance and offering you a short term lower payment.... Hmmmm Do those numbers add up to you?

If you are in the process of doing a loan modification for your Elk Grove home... It's really important that you run your numbers!

If this is an option you are looking at, please give me a call and we can sit down together and run those numbers! What is your best case option and what does that look like? Will the best case scenario for a loan modification solve your problem long term?

Get your answers and let's get you moving towards your financial recovery. I want to find a way to help you make the loan modification work... But if we can't find a way... I'd love to help you negotiate your Elk Grove short sale and make sure your other assets are protected.

This Elk Grove Short Sale Agent is ready to go to work for you!