Most people will never have to deal with a home foreclosure in San Anselmo, but there are still a surprisingly high number of foreclosures every single year. On average, there will be more than 200,000 active foreclosure cases every year throughout the United States.
When faced with foreclosure, people start to look for strategies to get out of it. Some of the most common strategies they turn to are loan modifications and loan forbearances. Unfortunately, people don’t always know how to make the most of these strategies without the assistance of foreclosure lawyers.
So, what are these strategies, and what exactly can they do for you? Let’s learn all about the difference between a loan modification and loan forbearance.
What is Loan Forbearance?
A loan forbearance, or mortgage forbearance, is not loan forgiveness but it is one way to potentially prevent foreclosure. It consists of a temporary pause in required payments. That means that you may have a few extra months to get back on your feet without having to lose your home.
Of course, your lender won’t provide loan forbearance just because you ask for it. In general, you have to provide evidence that you will be able to pay your debts at some point. Otherwise, you will end up facing foreclosure again.
Loan forbearance can be a great strategy if your situation is temporarily affected. Since your temporary situation will soon be over, you will be able to reliably pay payments in the future.
What is Loan Modification?
Loan modification is a more extreme strategy when facing a home foreclosure in San Anselmo. Instead of sticking with the same loan terms (but with a delay), loan modification changes the loan agreement and terms.
In some cases, you might get to your lender to change your agreement so that you pay lower interest rates. That means that you will pay less money each month.
In other situations, you can change your loan so that you have a longer repayment term. In both cases, you will pay more money later on, but less money in the immediate future.
Of course, these benefits come with a cost. At the end of the day, it is better to avoid ending up in this situation in the first place.
Either way, you are more likely to have success if you get the advice of a professional.
Know How to Use Loan Forbearance and Modification to Keep Your San Anselmo Home
We hope that you were able to take away something helpful from this brief article on a few of the most important differences to understand between loan forbearance and loan modification. At the end of the day, both of these are viable strategies to help you keep your San Anselmo home. However, depending on your situation, one will be more likely to be successful than the other.
To learn more about which strategy might work best for you and find help with your foreclosure situation, feel free to reach out and get in touch with us here at any time.