National Help Center Law Group Glendale — NHC LAW GROUP REVIEWS
Dealing with finances for your home can be a bit tricky, so here is some information about two key processes that offer practical solutions to avoiding foreclosures: a short sale and a home loan modification.
A short sale is a process in real estate in which the amount of money earned from selling a home is less than the balance of debts needed by the homeowner and required by liens. In this case, the owner cannot afford to pay off his existing debits, and his selling his home obviously is still not enough to cover them.
What a short sale does is offer a convenient alternative to a foreclosure. For a short sale to take place, the liens holders must agree to release the borrower of his debts and thereby accept less than the amount owed. The difference between the amount owed and the amount paid is known as a deficiency. The most important thing to remember is that all short sales are different: not all cases absolve the borrower of his debts. In order for the borrower to zero his debts, an agreement must be reached and written into a contract.
Short sales vary widely in many important factors, including how long they take to complete, how much of taxes, if any, need to be paid, and who is eligible. It is prudent to consult with your bank or mortgage lender to find out all the details for your unique financial situation.
National Help Center Law Group Glendale — NHC LAW GROUP REVIEWS
A home loan modification is a different process, allowing for the homeowner to continue owning his home. What the modification does is create a permanent change in one or several of the terms initially agreed upon in the mortgage loan.
The result of this process is that the owner is allowed to stay in his home (thus avoiding foreclosure) and make payments that are affordable on his budget. Three terms that are typically changed to allow for a loan medication are a lower interest rate, a longer term or a simple reduction in principle balance.
There are several things to know when considering modifying your home loan. You should know that, if they choose to, your bank has the right to inspect your home and conduct a physical review to find out its current condition and therefore actual worth. As well, the primary criterion for determining whether or not you are in fact eligible for modifying your home loan is proof that you are currently, as well as in the future, able to afford your new home loan.
