Knoxville Loan Modifications: Is It Right For You?

knoxvilleloanmodificationLoan modifications are one of the many options Knoxville homeowners have to avoid foreclosure on their home. For many homeowners, it seems like an ideal option, you get to stay in your home and get to lower your payments. If you're one of the many Knoxville homeowners considering doing a loan modification, here are a few things you need to know before deciding whether or not it is right for you. Be sure a loan modification is right for you. If your modification is approved, your lender will likely extend the term of your loan. And, if you owe more on your home than it is worth, loan modification might not be the right answer. Consider talking to a REALTOR® who has experience negotiating short sales, it could possibly be a better option for you. Loan modification isn't a refinance. It doesn't require all the credit checks and appraisals that refinances do. Loan modifications require financial hardship for approval. Loan modifications are stressful and don't always work. Loan modification can be a long process, filled with countless calls to the lender, and oftentimes, loan modifications don’t end up working. The whole process is a convoluted, bureaucratic mess. Generally, your lender is the one that services your loan. But more than likely they are not the one that owns your loan. The investor that owns your loan is a likely government entity like, Freddie Mac or Fannie Mae. Every investor has different requirements to approve loan modifications and it is your lenders job, as the middleman, to communicate it to you. It is because of so many different parties involved that loan modifications can be difficult to complete. Loan modifications aren't always permanent. Even if you successfully get a loan modification, they often carry a higher balance than the original loan. So even though the monthly payment may go down for sometime, you still owe more on their home than it is worth. And, eventually, your monthly payment increases, and you are in a worse place than before. Not to mention lenders can add all kinds of fees into your principle balance and increase your monthly payment without any notice. Are you wanting to explore your alternatives to avoid foreclosure on your Knoxville home? Please let me know if there is anyway that my team and I can assist you. We've helped many Knoxville homeowners explore what alternatives they have to avoid foreclosure. You can give us a call at 865-696-9002 or send an email to [email protected]. Also, be sure to check out our Knoxville Short Sale and Foreclosure Solutions Page.

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