The buzz continues about mortgage loan modifications. As Indianapolis homeowners are struggling financially, just as others are scattered around Indiana, they are being forced to consider foreclosure options before trying to list their homes to compete with other Indianapolis homes for sale. If you are, you may need to know more about loan modification basics.
Being in a desperate position is never comfortable and this is especially true when selling your home. To compete successfully in the Indianapolis real estate market, the best case scenario is to have enough time to work with your Indianapolis REALTOR® on the best pricing strategy and lower your price every month until you find a buyer. When you are upside down on your mortgage, you may not feel like time is your friend.
As you begin to search for what options may be available to you, you’ll most likely first stumble upon President Obama’s mission to help United States‘ citizens stay in their homes called Making Homes Affordable. This initiative was formed to help consumers receive free counsel on the loan modifications available. The version formed for Hoosiers is called the Indiana Foreclosure Prevention Network.
It is likely that if you have found yourself in the position to consider a loan modification, you are new to all of this and have questions needing answers before you can even begin to move forward. When a subject is new, it takes trial and error to even be educated about what questions to even ask. Below are some loan modification basics to help you get started.
Inspections. Lenders need to be sure that the home they are holding as collateral is sufficient to cover the amount of your loan. Because of this, your lender may perform any review that it deems necessary for verifying the quality of your property’s physical condition to ensure that its value will satisfactorily cover the loan modification. You will most likely find this especially true if your modified loan amount is greater than your original loan and your lender needs to make sure your property can cover principal and costs.
Fees. With loan modifications, you have the option of bringing assets current. This benefit will allow you to combine fees and expenses that are related to your mortgage. You may be able to join the modification, legal expenses and associated foreclosure fees for those items you have already had processed and that apply to your current default.
Owners who have accumulated copious amounts of expenses due to the loan modification and other fees can really take advantage of this by capitalizing them into the new principal amount of the mortgage loan modification, thereby reaping the benefits of having the reduction in principal and monthly cap.
Late Charges. Most likely, those homeowners who are financially struggling have also encountered late fees on their mortgage payments due to being behind. Typically, these fees have significant interest payments.
Although, the mortgagee should waive these fees when the loan is modified, we all know that should doesn’t mean it will necessarily happen. When modifying your loan, ask specifically about this issue if it applies to you.
Request a detailed summation of all the charges included in your new principal balance. If you find the late charges you have accrued were not waived, ask more questions. You may find, however, that you will be separately charged for these outside of your new monthly payments.
These tips are just a starting ground for you to explore about loan modification basics. Contact the free services offered by the current administration and state of Indiana for more information.