Short Sale Expert, Answers Common Questions About Loan Modification.

Quito Keulta Short Sale Expert Answers Common Questions About Loan Modification.

Quito has been in the Real Estate business for over 7 years and started helping people stay in their homes doing Loan Modifications due to the hardships people have been having in the last two years.

What is a Loan Modification and how is that different from Refinancing?

Loan Modification is changing the terms of the existing loan verses getting a refinance on your loan. The value has to be there by getting an appraisal and you must qualify. Loan modifications do not care what your credit score looks like.

How does someone qualify for a Loan Modification?

The bank will ask for a letter of hardship, has your hours been reduced, lose your job, self employed, divorce, death in the family, debt has increased. Not everyone will qualify but it is very important to look at all of their finances to see what is going on. What would cause someone not to qualify? If they make too much money, No Hardship, if they owe more than 729,000 they would not qualify.

What does the Loan Modification do?

The banks can drop or reduce their interest rates. For example if someone is paying 8% they may reduce it to 4% some cases down to 2% for several years or for the life of the loan.

Where does the difference go?

The borrowers do not have to pay the difference, its like getting a new loan. It is better than a refinance in the situation when they can’t make their payments.

What are the determining factors that a lender is looking for?

Their debt to Income, and also the ratio they make in income gross vs housing income. They are looking if someone exceeds 31% of the ratio. For example if someone brings in 4k a month and their mortgage is 1,400 per month what they bring in is over 31% in debt to ratio.

Does someone have to be in default before they do a loan modification?

If we can prove that they are close to being defaulting. Most of my clients are very behind and call me in a panic and may go to foreclosure. We can try to post pone the foreclosure so we can work it out. Is there any negative on doing a loan mod? I don’t see anything negative we are helping people stay in their home. It is a benefit to stay in there home so they don’t have to go and rent when they can reduce it to the same as if they are renting.

Does it mess up my credit?

If you are already behind your credit is already shot and foreclosure is a big impact in almost 200 points. A loan Mod maybe about 60-80 points difference in your credit. Within two years you should be able to get it back up as long as you continue to be responsible in the rest of your debts.

Why should I pay for a Loan Modification Expert?

Loan Modification can take 92-1980 days to be approved and is time consuming. You are probably working a 9-5 to earn money to make your payments and don’t have time to do this. We have the expertise to write the letters, we know what the banks are looking for. There are non-profits helping people but they mostly do not have the expertise in the industry to know what the banks are looking for.