What You Need to Know About a Short Sale
When you’re about to lose your property and everything you have invested in it, it’s usually sensible to think of how a short sale can help you. This relatively simple process could get some of your debts reduced, save your credit score and bail you out of a difficult situation.
Sometimes, things occur that cannot be avoided. Jobs are not as secure as they used to be back in the day. We don’t always have the chance to retire with the gold watch, medical emergencies and other problems occur that insurance will only cover partially and in some situations not pay at all.
As time passes, it can be hard to make the mortgage payments and there reaches a point where the lender asks you to pay for the late charges or face foreclosure. When this happens, you have a few options to choose from. Some may help, others may not but either way, something has to be done. This might be a good time to know what a short sale entails and if it can help you. Find a short sale realtor that can give you short sale help.
The best solution is to get the money and pay off all the back charges, but that is not always possible. After, all if it were an option, you wouldn’t be in the position you are today.
The next option is to allow the lenders to foreclose on you. With this option, you get to leave your property in the hands of the lender, who then dumps it on the market for the best price they can get. This helps recover several of their losses and leave you with nothing. Additionally, this tragedy gets recorded on your credit report, which affects the rating for the next seven years. Not only that, but you are not allowed to purchase a home for the next five years by the law.
The next option might work for you in the end. After going through all the other options and cannot find one that would work for you, then a short sale might be the only solution. A short sale involves observing a person that will purchase at a loss. Generally, banks allow this, but it takes a lot of time since you have to meet the demands the lender makes like covering the repair costs, closing costs and more.
Here are the benefits of a short sale:
-You get to retain some dignity knowing that you sold instead of losing your home
-There won’t be any mortgage payments to make
-You will not suffer the social stigma of foreclosures
-You will be eligible to purchase another home in two years instead of five or seven years.
-If your credit report doesn’t show a 60-day plus late pay, you will be eligible to purchase another home immediately.
However, a short sale has its downsides as well:
-The lender will want to assess personal records like bank accounts, tax returns, assets, and liabilities, etc.
-Waiting for the lender to respond to your offer can be frustrating
-Also, there’s no assurance that the lender will agree to a short sale offer.