There are several situations that prevent you from making mortgage payments. But rather than face a foreclosure, speak with your lender right away about a short sale option. A short sale is beneficial for homeowners who would otherwise be facing foreclosure. It is also beneficial for those who need to sell their home now, but who are upside down because of market fluctuations.
Financial Rescue
A foreclosure is when the lender seizes the property from the borrower, auctions it off to the highest bidder, and then sometimes pursues the borrower for the remaining balance. This process is lengthy, expensive for the homeowner, and often leads to bankruptcy. Having a foreclosure and/or a bankruptcy on your credit makes it more difficult to obtain credit in the future, and can make it more difficult to find employment and rent a home for several years.
A short sale, on the other hand, is where the lender agrees to let the property be sold for less than what is owed on the mortgage. This makes the sale go more quickly, and absolves the homeowner of any financial responsibility for the property once it’s sold. A short sale can help you avoid bankruptcy, and preserve your good credit.
Your Lender Wants to Help
Although mortgage lenders can seem like big, impersonal corporations, the fact is they don’t want to foreclose on your home. The litigation process for foreclosure is expensive, and they won’t get a fair market price on your home if it has to go to auction. A short sale is the best option for your lenders, just like it is for you, because it’s quicker, it costs them less money, and they’ll recoup more of their losses on your home.
If you communicate with your lenders as soon as you begin to struggle with your mortgage, they will be willing to help you avoid foreclosure in almost every case. While it will mean that you have to sell your home, but you can avoid all of the other negative consequences of foreclosure with a short sale.
Breathe Easy
The short sale process can sometimes be a little overwhelming. It takes some time, there’s a lot of paperwork to fill out, and there’s some uncertainty about how much longer you’ll have your house. While a short sale is less stressful than a foreclosure, it’s still a lot to process. Try to just take things one step at a time, and be patient.
Retaining an experienced attorney can help you navigate your way through the short sale process. Your attorney can work with your lender to help you receive more favorable terms, such as a relocation allowance once your home sells, and a little extra time to get packed and moved. He or she can also help you with paperwork to make sure everything is done right the first time.
Don’t be afraid to consider a short sale if you’re facing foreclosure. It will likely be a better option for you. If you have more questions about short sales or are considering one, give us a call.