A loan modification is when a lender agrees to lower the interest rate or the monthly payment (and sometimes both) on an existing mortgage. When a borrower is behind on their payments, a lender will consider doing a loan modification as an alternative to foreclosure.
Some quick facts:
- A loan modification can be requested by the borrower, but must be approved by the mortgage lender.
- Approval is based on the borrower’s current income and monthly obligations and not on the borrower’s credit score.
- Though more difficult, when a borrower is current on their payments, a lender may consider a loan modification because of a documented hardship, such as job loss or large unexpected medical bills.
Continue reading "What's a Loan Modification?" »
Purchase price is the #1 obsession for home sellers. Set the sales price too high and your house sits for months (years?) with no offers. Too low and you leave money on the table. Sellers often wonder, "What's a reasonable price for my house?"
Let's start with the bad news. No matter how hard we all wish it were so, here's what a fair price is not:
- It's not your appraised value from two years ago
- It's not your mortgage balance plus $20K of "profit"
- It's not what your new neighbor paid for the house next door
Even as sellers with hundreds of sales, we've made the mistake of mis-pricing a house more than once. And every time, we suffered the agony of a long and expensive vacancy. Finally, we learned to accept the harsh truth: Sellers don't get to determine the fair price for a house.
The good news? Buyers don't either.
Continue reading "The Shocking (!) Truth About Sales Price" »
