Short Sale vs. Loan Modification – The Facts
We talk to people all the time that are in the midst of a loan modification or are interested in applying for a loan modification. While we have seen a few loan modifications that have worked, the majority of them have been very minimal and they have not addressed the basic causes of the homeowner’s hardship nor have they done anything about the negative equity in people’s homes. Before you make the decision, consider these facts:
1) A short sale can help you avoid foreclosure and the negative impact that it will have on your credit. Most of the loan modifications that we have seen have not been successful and have only delayed foreclosure. The loan modifications that were successful generally modified payments by $50 to $200 but did nothing about the hundreds of thousands of dollars of negative equity in the property.
2) A short sale done through Pruven Real Estate & Investment, LLC will cost you nothing. In fact, we may even be able to qualify you for up to $3,000 in relocation assistance depending on your loan and servicing company. On the contrary, most loan modification companies will charge you up front fees whether they are successful or not. We have even seen lenders charge homeowners to modify their own loans. Again, most of the “successful” modifications that we have seen resulted in only minimal reductions in payments and did nothing about the negative equity in the property.
3) Through a short sale, you may be able to walk away from the negative equity in your home. A loan modification will tie you to an upside down property even longer and prevent you from rebuilding your net worth.
4) After a short sale most people are able to purchase another property after two years. With a “successful” loan modification, you’ll be tied to your upside down property and the negative equity associated with it for years. You’ll be unable to take advantage of the tremendous buying opportunities that are available today.
When it comes to short sale vs. loan modification the choice is yours. The overwhelming majority of the property owners that we have come into contact with have decided that short selling is the best option for them. Contact us today so that we can help you understand your options and make the right choice for you.
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