When an individual finds him or herself in a challenging situation where everything is at stake it’s almost a certainty that they’re going to have questions about the situation that they’re facing. When it comes to Santa Barbara short sales this too is almost always the case. While some individuals don’t even know what a short sale is others may not know if they qualify for one while others still may not know how the process actually works. Working with a CDPE certified Santa Barbara real estate agent will not only answer questions people might have but will put to rest many of the fears and anxieties they have regarding a short sale and the potential loss of their home.
Will I Qualify for a Short Sale?
Not everybody’s going to qualify for short sale and there are several different things a lender will use to determine whether or not somebody is eligible for one. The first qualifier the lender is going to consider is financial hardship. Your lender will look at your situation and determine if the situation itself is actually causing you to have trouble affording your mortgage. Secondly lender will consider what is known as monthly income shortfall. This is insider jargon for “you have more month than money” and lenders will want to see that you can not actually afford your home or will soon be unable to afford your mortgage. Lastly a lender is going to consider insolvency. Lenders want to see that you do not have any significant liquid assets that might allow you to pay down your mortgage. Working with a Santa Barbara real estate agent who deals specifically with short sales will help determine whether or not you qualify for a short sale so be sure to contact one should you see a potential foreclosure in your future.
What Is Mortgage Modification?
A mortgage modification can be a great alternative to both Santa Barbara foreclosures and Santa Barbara short sales. In a mortgage modification scenario a lender will generally change one or several of the following.
- Your interest rate
- Your principal balance through a reduction
The terms of your loan and example being from adjustable to a fixed rate mortgage.
Why Do Lenders Modify Mortgages?
Many lenders especially in recent times have come to the realization that in many cases it’s actually better for them to work with current homeowners into lower payments and even improve the terms of mortgage to keep homeowners in their homes. Foreclosures actually cost lenders quite a bit of money and can range anywhere from 35 to 50% of the value of the property that is being foreclosed on. This means a keeping borrowers in their homes is good for everybody not just the lender.
What Will I Need to Do to Qualify for Mortgage Modification?
There are several things you will need or need to do in order to qualify for mortgage modification these are as follows:
- Information about your primary mortgage, more specifically your monthly mortgage statements.
- Information about any second mortgages equity line of credit’s you have on your home.
- The account balances and minimum monthly payments due on all of your credit cards.
- Any and all information related to monthly payments on any other debts such as student loans vehicle loans.
- Your last tax return.
- Savings and asset information.
- Paperwork that shows your monthly gross or income of your household which includes recent pay stubs or other types of income documentation.
If you’re unsure whether or not you will qualify for mortgage modification feature to speak with a CDPE certified Santa Barbara real estate agent. He/she will be able to provide you with all the answers you require.
What Qualifies Me for Mortgage Modification?
In order to find out whether or not you are qualified you and a Santa Barbara real estate agent will need to contact your lender and have all of the aforementioned information ready prior to the call. You’ll be allowed to ask what options are available to you and if by chance the person you end up speaking with does not understand what you’re asking you you’ll be allowed to speak with other representatives who deal with mortgage modification. You may speak with somebody from loss mitigation, mortgage modification, or H.O.P.E.. To find out if you will ask you qualify for mortgage modification prior to speaking to anybody you can visit www.makinghomeaffordable.gov and take their online eligibility test. Once completed this test will let you know whether or not your eligible for a modification through the government-sponsored program known as Home Affordability and Stability Program.
If I don’t qualify for mortgage modification and cannot afford my home and I owe more than it’s worth what can I do?
Despite what you may believe or what you may have heard this isn’t an uncommon scenario for homeowners. In cases such as these you and your Santa Barbara real estate agent will want to work closely with your lender and consider a Santa Barbara short sale. A CDPE certified Santa Barbara real estate agent will have undergone plenty of training in how to both avoid foreclosures and negotiate a short sale with a lender. A short sale is a great alternative to a foreclosure because it allows a homeowner to sell a home for less than what they owe and completely avoid foreclosure. If a short sale interests you be sure to contact a Santa Barbara real estate agent for assistance before proceeding.
Affordable Refinance, What Is It?
Affordable refinance is actually quite simple. If you’re lender is either Fannie Mae or Freddie Mac you may be eligible for an affordable refinance. This simply allows homeowners refinance their home and lower their monthly mortgage payments. Speaking with a Santa Barbara real estate agent and working closely with one will help you determine whether or not this option is available to you.
I’m Interested in Affordable Refinance but What Are the Qualifications?
- According to government documentation the following is a list of affordable refinance qualifications:
- You must be the owner/occupant of the home with one to four units.
- Your property loan is either owned or securitized by Freddie Mac or Fannie Mae.
- You are current on your mortgage payments at the time of application and you haven’t been more than 30 days late on your mortgage payment within the last year.
- The current value of your home is either about the same or slightly less than the amount you on your mortgage.
- Your current income is sufficient enough to maintain a new mortgage payment.
- The refinance program improves long-term affordability or stability for the homeowner.