In today’s scenario there are almost 8 out of 10 people who buy property by borrowing money from banks in terms of home loans. As there are very few people who are having complete amount to make payment for property. Normally it has been found that there are various people who have taken home loans and are not able to make payment as per the schedule. For those a new facility/agreement called “Loan Modification” has been launched between the borrower and the lender. And in this agreement they can make changes as per the requirement like re-bargain the terms of loan (s).
Loan Modification has made it easy for the borrower to make the timely payment with easiness. There can be changes in number of installments, rate of interest, period of repayment, size of interest, to cut off the penalty for late payment or non-payment or it can be fixed interest rate instead of flexible etc. Guidelines for loan modifications are mentioned in Federal Home Affordable Modification Program (FHAMP) issued in 2009 to provide support to the homeowner. All those who took credit before January 2009, bought a property value less than the fixed worth (mentioned therein i.e. $ 7279750) and come under the hazard group (income is very much reduced, high expenses, or owing an amount which is more than the value of that property) can avail this facility of Loan Modification.
There is one more alternative to make the payment of loans i.e. by selling out the property. if you are getting good amount of your property (eg. properties in Delhi NCR) and its market value is high then you can sell the same and can make good profit and also will be able to pay your mortgage. But in case the current market value of the property is lower than the actual cost and if you sell it at lower price then you will not be in a situation to pay the complete amount of loan you have taken from the bank. This is also known as short sale and in this situation you will not be able to repay the entire amount you have borrowed from the bank. In this case you can sit with your lender and make some kind of agreement for the repayment of loan and also let him accept the advances made through short sale. It all depends on the lender’s choice whether he would accept the deal or not. It should be noted here that in case of “Loan Modification” ownership of the property does not change and you continue remain the owner of that property but in case of “Short Sale” ownership of the property transfers to the lender.
Loan Modification has made it easy for the borrower to make the timely payment with easiness. There can be changes in number of installments, rate of interest, period of repayment, size of interest, to cut off the penalty for late payment or non-payment or it can be fixed interest rate instead of flexible etc. Guidelines for loan modifications are mentioned in Federal Home Affordable Modification Program (FHAMP) issued in 2009 to provide support to the homeowner. All those who took credit before January 2009, bought a property value less than the fixed worth (mentioned therein i.e. $ 7279750) and come under the hazard group (income is very much reduced, high expenses, or owing an amount which is more than the value of that property) can avail this facility of Loan Modification.
There is one more alternative to make the payment of loans i.e. by selling out the property. if you are getting good amount of your property (eg. properties in Delhi NCR) and its market value is high then you can sell the same and can make good profit and also will be able to pay your mortgage. But in case the current market value of the property is lower than the actual cost and if you sell it at lower price then you will not be in a situation to pay the complete amount of loan you have taken from the bank. This is also known as short sale and in this situation you will not be able to repay the entire amount you have borrowed from the bank. In this case you can sit with your lender and make some kind of agreement for the repayment of loan and also let him accept the advances made through short sale. It all depends on the lender’s choice whether he would accept the deal or not. It should be noted here that in case of “Loan Modification” ownership of the property does not change and you continue remain the owner of that property but in case of “Short Sale” ownership of the property transfers to the lender.
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