Selling Your Home After a Loan Modification: What to do

A home for sale in Charlotte, North Carolina, after a loan modification

Homeowners in North Carolina looking to sell their homes after a loan modification need to consider a few factors involved with mortgage payments. 

The question on your mind may be, can I sell my house after loan modifications in North Carolina? The answer is complex, but it depends on your credit score before you modify your loan from a lender. 

Understanding the type of loan modification you agreed to at the time and how that loan affects you in the long run when you want to sell your home. 

The real estate market in North Carolina includes expert realtors who know about lending procedures, especially after the mortgage crisis in 2008. Over the years, selling a house can still be done even if you have a modified loan. 

What Is a Loan Modification 

A loan modification offers to refinance your mortgage payments for those who struggle to pay their monthly mortgage payments. In addition, mortgage loans are an option for borrowers who need help avoiding foreclosure. 

A loan modification differs from a mortgage refinance because a lender won’t replace your existing mortgage with a new loan. Refinancing means getting an entirely new loan, while a modification changes your current loan terms.

Here are a few changes a mortgage lender might make to adjust your mortgage payments: 

  • Lower the interest rate 
  • Lower the principal amount 
  • Extend the length of the loan 
  • Change to a fixed-interest loan 

These changes are to assist you with keeping up with your mortgage payments. It’s important to know that a loan modification doesn’t reduce your mortgage balance. 

How Do Loan Modifications Work 

The mortgage loan modification process works by understanding your current financial situation. Modifying a loan is at the lender’s discretion, but they always assist you in getting an affordable monthly mortgage payment. 

The loan modification process starts with you proving that you’re in the middle of financial hardship. Some of these hardships include job loss, illness, or the death of a loved one. Another variable that may grant you a changed loan is if the interest rate makes it difficult for you to make payments. 

When applying for a mortgage loan most of your financial information is required, including the mortgage information and the exact situation you’re in. 

Here are several hardship situations that may make people unable to afford their monthly mortgage payments: 

  • Divorce or separation 
  • Natural disaster 
  • Health pandemic or epidemic 
  • Illness or disability 
  • Drop in your annual wages 

Once you prove your financial situation to a mortgage lender, they’ll check your eligibility for changing a loan before offering you a modification that works for you. 

Eligibility is different for every person. Sometimes you won’t be considered eligible until you’ve had one or more missed payments. Lenders need valid information about your financial history and monthly mortgage payments to assess whether or not a modification is viable. 

One way that a loan modification works is by reducing your interest rate. Your lender can lower your interest rate, which reduces your monthly payments by hundreds of dollars. This way of modifying your loan is similar to refinancing, but you must pay fees and closing costs with refinancing. 

Another way to modify your home loan is to lengthen the amount of time for paying your term. Lenders lessen the amount you pay per month while increasing the number of months that you’ll be paying for your mortgage. 

Here’s something to keep in mind, the most common length of time to extend your loan is ten years. Another thing to remember if you decide to extend your loan is that you’ll pay more interest over time. 

There’s no guarantee that one method outweighs the other, but talking to a lender about your options will help you make the right choice. 

Can I Sell My Home After a Loan Modification 

As a homeowner, there’s no reason why you wouldn’t be able to sell your house after a loan modification. However, you can’t sell your home before completing the modification process

The exception to this rule is if you have a permanent loan modification. 

Loan modifications nearly always become permanent after you’ve gone through a trial period of three months. So your three-month trial proves that you can pay your new mortgage on time. 

When your loan becomes permanent, you can put your efforts into buying a new house. You’re guaranteed to be able to buy another house after receiving a loan modification once you haven’t missed payments for 12 months after having the modification. 

Selling your house after loan modifications in North Carolina means you need to know the home selling process in NC. The real estate market in North Carolina ensures you list your home at a competitive price. 

A downside to selling your house after a loan modification is that refinancing can damage your credit score. However, many people gain a mortgage loan to help them secure a financial future. Once you adjust your credit score and stabilize your finances, you can sell on your own terms. 

While you won’t have a sales restriction on your home, all lenders require you to repay your original mortgage at the time of sale on your home. 

One of the easiest ways to sell your house after loan modifications in North Carolina is by selling your home for cash. 

Many cash home buyers in Monroe will offer you money to sell your home as-is for cash. Meaning they buy the property, then make necessary changes to resell the house later. 

Selling your home as-is for cash is one of the quickest ways to sell your home because you don’t need to take up your time with holding open houses, cleaning the property, or making repairs throughout your house. 

How to Sell My House After a Loan Modification 

A white and red "For sale" sign with a beautiful blurred out house in the background for sale after a loan modification

If you want to know how to sell your house after a loan modification, then the first thing you need to know is always remembering to get a payoff amount from your lender in writing. 

Once you have the payoff amount, working with a realtor familiar with loan modifications is necessary. If you need to sell your house in North Carolina, we buy houses North Carolina residents are eager to buy.

Experienced realtors will help you close your home whenever you’re ready. You can sell right away with your new loan modification or wait until you’re financially prepared. 

The short sale option is for those who are unable to make their mortgage payments each month. If this is how you want to sell your house after a loan modification, you must understand what a short sale is. 

A short sale is when your house sells for less than both the mortgage balance and total costs. 

Sometimes this option is needed after a loan modification because you have a continued financial situation that you need to deal with on top of paying the loan. 

Many home buyers are willing to assist you with selling your home in North Carolina. So if you need to sell a house fast in Charlotte, you’ll find a company that cares about your home. 

Here’s a step-by-step guide on how to sell your house after a loan modification in North Carolina without a real estate agent: 

  • Step one: Talk to an agent about your home 
  • Step two: Schedule a walkthrough of your home
  • Step three: Receive your cash offer 
  • Step four: Schedule a closing on your house 

Hiring a real estate agent isn’t for everyone. You need to be prepared to pay the high fees; and you also need to be willing to let them stage and prepare your home for it to be shown to potential buyers.

When you’re selling a house without a realtor, this is known as a For Sale By Owner by North Carolina home sellers. The most significant advantage to selling your home to a cash buyer is you don’t have delays in home inspections and loan approvals. 

Putting your house on the real estate market means making the house appealing to potential buyers. In addition, improving the exterior of your home can be costly, so setting aside money from your loan modification will help you put your house on the market. 

Also, make sure you set a realistic asking price for your house. Plenty of buyers are willing to negotiate lower offered houses. 

Wrapping Up 

Facing financial hardship is terrifying for anyone because you have to face the impending reality that your home may end up in foreclosure. 

If that happens to you, there’s no need to panic because multiple loan modifications can help you gain back your financial stability. In addition, after attaining a loan modification, you can still sell your home if you want to. 

Whether your financial hardships are temporary or long-lasting, always keep in mind how a loan modification could help you sell your home. 

Selling your home after a loan modification in North Carolina leads you to have multiple options available when ready. You can sell your house for cash as-is or use the real estate market to help you. 

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