Loan Modifications
Homeowners often don’t know what a loan modification is. Lenders would rather help borrowers with a short-term solution instead of incurring the expenses of foreclosure. Banks want to avoid this at all costs which is why they came up with loan modifications. Banks will sit down with borrowers and lower their payments either for six months to a year or two years. Now borrowers of the mortgage still have to pay this back, but they tack it on the end of their mortgage.
Foreclosure Boom?
Unfortunately, some smaller banks may not be able to negotiate lower terms as they need the funds to keep their doors open. This is why they are predicting there might be a foreclosure boom. This will open up inventory in the housing market which has been so hard to find when the federal government lowered the interest rate. Purchase prices will start to normalize then as supply increases. The feds have made a statement that they will not increase interest rates until the end of 2023!
Low-Interest Rates
If you are looking to start investing in a vacation rental, this is the most affordable they have ever been in our history. You will probably never see interest rates this low ever again. Lower interest rates are a tactic the government uses to encourage lower mortgage payments so that borrowers will use those savings to put back into the economy. Purchasing and selling homes also create about 50 jobs per transaction which also helps the economies. There are mortgage officers, realtors, escrow officers, loan officers, lenders, appraisers, and so many more involved when you purchase a home. You are providing them work and helping the economy.
