For people suffering from bad credit score or mortgage issues in San Diego, here are five myths related to the loan modification, which stand inappropriate in the minds of the borrowers.
Myth 1: My bank is after my house and wants it.
The truth is that lending institutions and banks simply do not want to foreclose. They will earn more if you keep paying them their installments. In the action of foreclosing, not only do they lose on the monthly sums, they also have to bear extra expenses such as attorney fees, rehabbing the property, agent for reselling the property and so on. Then again, the lender might not even get the real value for the property, selling it at a loss. Therefore, search for all options in terms of loan modification with your bank or lending institution.
Myth 2: I will not qualify for loan modification due to bad credit score.
One might have difficulty in refinancing the loan. However, when it comes to loan modification, the lender may gladly do the same for you, without regards to your credit score. Then again, you can also work towards improving your credit score by loan modification, while also preventing the chances of bankruptcy or foreclosure.
Myth 3: I have paid my installments on time. I will not be qualified for loan modification.
The truth is that anybody can opt for loan modification. It was in the old times when the person had to miss the full payment of monthly installments for two consecutive months before he was deemed suitable for the process of loan modification. However, with changing times and requirements, several lenders have changed their policies as well. Do not suppose before you have spoken with your lender regarding the loan modification.
Myth 4: It will be better for me to declare bankruptcy rather than opt for loan modification.
It is no doubt that opting for foreclosure or bankruptcy might save you from a lot of headache. However, a foreclosure might have your lender pursue a case against you asking for the difference in the price of the mortgage and that received by the sale of the house. The lender may, in such a case, even file a law suit against you. Then again, opting for bankruptcy might save you from law suit issues and other problems. However, it will smear mud on your credit history, making it near to impossible for you to get a loan approved in future. Hence, opting for loan modification is the best option to choose from.
Myth 5: I have already received the foreclosure notice. It is too late to do anything.
The truth is that as long as you have not abandoned the house or have the house auctioned for foreclosure, there are chances that your lender may still be willing to work out the terms with you. Opt for loan modification and speak to your lender regarding the same. Chances are that your lender too may be willing to opt for alternatives. The sooner you do the same, the better it will be and the better chances you will have of retaining your property and saving it from the clutches of foreclosure.
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