Short Sale VS Loan Modification
A #shortsale and a #loanmodification are both alternatives to a traditional sale of a property, but they have some important differences.
A short sale occurs when a homeowner sells their property for less than the amount they owe on their mortgage. The homeowner must get the approval of their lender to proceed with a short sale. If the lender agrees, the homeowner can sell the property and the lender will forgive the remaining balance on the mortgage.
A loan modification is a change to the terms of an existing mortgage loan made by the lender. The goal of a loan modification is to make the loan more affordable for the borrower, often by reducing the interest rate, extending the loan term, or changing the type of loan.
There are some key differences between a short sale and a loan modification:
Ownership: In a short sale, the #homeowner sells their property and gives up ownership. In a loan modification, the homeowner remains the owner of the property.
Credit score: A short sale may have a less negative impact on a homeowner's #creditscore than a #foreclosure, but it can still have a negative impact. A loan modification may have a less negative impact on a homeowner's credit score than a foreclosure.
Timing: A short sale can take place at any time, while a loan modification is a process that typically requires the borrower to negotiate with their lender.
Outcome: A short sale allows the homeowner to sell their property and potentially avoid foreclosure, while a loan modification allows the homeowner to keep their property and make their mortgage more affordable.
It's important to carefully consider the pros and cons of a short sale versus a loan modification before making a decision. It may be helpful to speak with a real estate attorney or financial advisor for more guidance.
Full Version of Video: • The Short Sale Showdown: How to Avoid...
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Ruben I. Rodriguez
@OfficialRealtorRuben
O: 786.474.4654
