Short Sale Vs. Foreclosure

short sale

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.

Foreclosure Vs. Short Sale

Building in San Diego

What is the Difference Between a Foreclosure and a Short Sale?

Owning a home has been the dream of many people throughout the ages. When things work well, it can provide a roof over your head and a place to “hang your hat.” Unfortunately, it can also be a difficult situation when you experience some financial reversal. You might start out getting behind on the mortgage one month and before you know it, you are facing the possibility of losing your home to the bank.

When this happens, most people start looking for a solution. In some cases, you might be able to sell the home outright to satisfy the mortgage and perhaps even walk away with a little money in your pocket. What do you do, however, when you can’t pay the mortgage, and you owe more on the home than it is worth? This is a fairly common problem in today’s economic environment. You can get short sale help in any city or state.

You have two different choices, although neither of them is going to be ideal in all situations. Those choices are to look into the possibility of selling the home as a short sale or walking away from the home and allowing the bank to foreclose. When you take a look at the arguments for a foreclosure vs. short sale, you start to piece together which is the best choice for your situation.

Foreclosure – This is the option that most people are familiar with and it is something that might help a person out of a difficult situation. The process allows the homeowner to turn the home back over to the bank, but it isn’t all that simple of a job. That is especially true when there is a difference between what you owe on the home and what the house is worth. You might end up still owing a balance at the end, and it can cause further financial burden.

Also, a foreclosure is going to put a hit on your credit and your ability to get another loan is going to be compromised. On the upside, however, you might be able to stay in the home for an extended amount of time without paying the mortgage. It is best if you talk to a lawyer about the situation.

Short Sale – If you are upside down on your mortgage, a short sale may help you to get out from under the situation by selling the house for less than it is worth. You will need to work with the bank but it might help to preserve your credit, and you can avoid some of the issues associated with a foreclosure. At the same time, you need to be aware that you could receive a deficiency judgment and owe the balance.

This brief look at a foreclosure vs. short sale can help you to make the right decision. Just make sure you communicate with the bank and look at all of your options. You can then move forward with the best choice and start to look forward to picking up the pieces.

Modification Vs. Short Sale

Which Is In Your Best Interests?

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Are you facing foreclosure? It is scary, and many homeowners scramble to find out their choices during such an uncertain time. You need a roof over your head, and financial disasters like that can cause turmoil. There is help available, and two solutions people often consider are short sales and home loan modifications. The latter is the preferred solution because put merely; you get to stay in your home.

You don’t want to lose your home. If there is nothing you can do, then a short sale before foreclosure might be the best option. If you’re haven’t yet checked into mortgage loan modification options, however, you’re not going to know that there is nothing you can do. There are so many ways in which home loan modifications are working out for homeowners nationwide. You have to reach out for help to see what’s available.

One of the benefits of a home loan modification is that homeowners can sometimes qualify for extended payment terms. For sure, you would instead be looking at shortening your mortgage. Keeping your home sure beats losing your home. Extended payment terms make the monthly amount of your mortgage smaller, making your home more affordable. If you were to qualify for that type of modification, perhaps the payments would be in the ballpark of your budget.

In a situation like the one described above, the mortgage company also benefits because they make more interest off of the loan over the extended period. Some of the modification arrangements don’t benefit the mortgage company quite as much. Some home loan modifications are part of government programs. That being said, it’s important to understand that the mortgage company isn’t always going to be on your side regarding making certain agreements. Check out the San Diego Short Realtor – Ruhl Team Short Sale.

You want to be realistic, persistent and work towards the best possible solution for both sides so that you can stay in your home. Now that we have that out of the way, one other answer is to get the interest rate on your loan lowered. While this might not benefit the mortgage company as much as an extended payment period, it is still a workable solution. You will want to talk things over with the right person to see if this is an option in regards to your mortgage.

As you consider whether a home loan modification is right for you, it’s also essential to no the disadvantages or the drawbacks. Some of them are quite clear, yet are outweighed by the potential benefits in some instances. For example, an extended mortgage payment plan from 30 to 40 years keeps you in your home, but you’re going to significantly more money over the life of the loan.

Again, it pays to be realistic and make wise decisions as a homeowner. If you were to not seek out home modification, would foreclosure or a short sale be the only choice? If so, perhaps an amendment would be in your best interests.

Differences Between Foreclosures and Short Sales

Foreclosures and Short Sales

foreclosure home

There are two fundamental ways a homeowner can work through a default on their mortgage. They can either lose the home through a foreclosure, or they can avoid this process and sell the home for less than what is owed on the mortgage. This is called a short sale because the amount the house sells for falls short of covering the entire loan.

For example, a foreclosure and by a short sale realtor in San Diego will affect the homeowner’s credit score negatively. However, a short sale impacts it less severely than a foreclosure. A bank will foreclose on a home in two ways. It will either do it judicially or non-judicially. State laws determine this process.

A judicial process is handled much like a regular lawsuit with a complaint and summons being filed with the court and served on the homeowner. The process culminates in the lender obtaining a judgment against the homeowner.

The property is sold at an auction to pay the judgment. With a non-judicial foreclosure, the process is often quicker, and it does not require that the lender do much more than file a Notice of Default, serve it on the homeowner and pursue a sale of the property if the homeowner cannot reinstate the loan. A reinstatement would require that the homeowner pay all the arrearages to cure the default.

The main difference between a foreclosure and a short sale is that the lender is willing to take less than the amount of the balance due to them. The property is listed on the market usually by a real estate agent with experience in the short sale process. Any real estate agent can register the park, however. The home is then sold to a buyer who agrees to the particular terms outlined in the bank or lender’s sales agreement.

Once the house is sold, the bank receives payment and settles the matter. The homeowner will not receive any proceeds from the sale, but they will be able to have time to move elsewhere and be able to avoid having a foreclosure on their credit report. A short sale has tax ramifications as the balance not paid to the bank is written off and can be viewed as income by the IRS. The owner may or may not have to pay taxes on this amount.

For instance, a home has a mortgage balance of $400,000 on it. The bank agrees to let the homeowner sell the property for $300,000. There is still a balance of $100,000 owed but since the bank is not going to require this sum from the sale of the property, that $100,000 is treated as taxable money.

A foreclosure can be avoided if a bank or lender agrees to let the homeowner make a short sale instead. Of course, if the property can be sold for more than the mortgage amount, the owner can list and sell the property before a foreclosure action takes place. Both foreclosure and a short sale are ways a person who defaults on their mortgage can resolve this matter and move forward.

What is a Short Sale Process

What is a Short Sale Process?

Shirt Sale Process

When you fall on difficult economic times or experience a severe financial reversal, you might find that you are no longer able to afford your current lifestyle. Some downsizing may be necessary, and this could include the possibility of moving to a smaller and more affordable home. In the process, you might run into a difficult problem that is relatively common in today’s economic environment. You may want to sell your home, but you also might owe more on the mortgage than the house is worth. If you are facing such a problem, you can consider the possibility of a short sale.

By this point, you might be asking yourself, what is a short sale? In a nutshell, it is a sale that takes place when your home is sold for less than it is worth. This may seem like a fantastic idea for those who are facing foreclosure, but it is essential to understand more about the process and the potential pros and cons that surround this possibility.

First of all, we will discuss the process in more detail. Once you miss payments on your mortgage, you will start receiving letters that warn you of the possibility of default. If you continue to lose payments, you will go into default, and you are now at risk for foreclosure. For instance, you can talk to the short sale realtor in San Diego about the possibility of getting some short sale help. It is important to work along with them because they will have to approve the process.

If you are in default and the lender agrees to it, the short sale process can begin. During the process, you will likely continue to live in the home and will be responsible for maintaining it during that time. This is very important to remember. Unfortunately, many people who go through foreclosure will trash the house out of bitterness and frustration. It is vital that you take care of the house as if it were still your own. You can live in it without paying the mortgage in most cases, so take advantage of that time to put some money aside. Once the sale takes place, you will turn the keys over and begin living somewhere else.

The benefit of a short sale is that it can get you out from under the burden of a mortgage that you can no longer afford. Also, the bank benefits because they are also relieved of some of the financial issues that would have resulted from a long, drawn-out process of foreclosure. That doesn’t mean, however, that there aren’t some potential issues.

A short sale can save your credit and give you a fresh start. In some cases, however, the lender may still come after you for a deficiency judgment, and you would then be responsible for paying the difference. This is something that needs to be checked into in advance. As long as you make the right decisions and look at all of your options, you might find that a short sale is the best choice for you.

Home Loan Modification Over A Short Sale

Benefits Of Choosing A Home Loan Modification Over A Short Sale

Short Sale

As the US economy entered the recession a decade ago after the housing market crash, many Americans found themselves struggling with their mortgages. Adjustable rate mortgages, payments that were too high, you name it, a domino effect ensued. Many people were upside down in their mortgages, and the foreclosures were running rampant. In the face of foreclosure or any other sticky mortgage situation, two options that exist are a loan modification and a short sale. What are the benefits of choosing the loan modification?

Have you heard of HAMP? It’s the modification program that the US government started in response to the foreclosure trend described in the previous paragraph. It’s important to understand that there are different types of loan modifications. Even under HAMP alone, there are various ways that homeowners can find relief in regards to their mortgages.

When facing foreclosure, homeowners find themselves in stressful situations that are hard to deal with. Sometimes they think the necessary action is to wipe the slate clean quickly and go after a short sale. A short sale can be beneficial in certain situations, but it’s not always the answer. It’s time to look more closely at the benefits of choosing a loan modification over a short sale.

In some instances, the interest rate on the mortgage can be lowered. The repayment period of the loan can be modified, and there are even times when a particular portion of a home loan can be forgiven. Payments can be halted as well, and it all depends on what is best for you and what you qualify for in regards to your situation. A home loan modification isn’t the easy way out by any means, but it is an opportunity for homeowners that are struggling to stay in their current homes.

With a short sale, you’re certainly getting ready to move on to a different place to live. You are hoping that the short sale provides enough capital to pay off the mortgage and then some, but that’s not always the case. As a matter of fact, when people are upside down in the mortgages, it’s unlikely to be the case. It’s still best to have a more workable solution, and the home loan modification options available to you might be the best choice. We recommend using the best short sale realtor San Diego company

Not only would you keep your home, but your credit wouldn’t be in the toilet either. A short sale might be better than a foreclosure. Before you throw in the towel, it might be a better solution to see what you can do to stay in your home. Financial difficulties are never easy, but perhaps you can get through this with the same roof over your head, one day at a time.

You will undoubtedly have to find out if you qualify for a loan modification. There are going to be steps that you have to take. They are worth exploring if you want to stay in your home. You have to see what’s available to you in the form of a mortgage loan modification.

Short Sale Experts

A Guide To The Different Benefits Of A Loan Modification Versus A Short Sale

Short Sale Experts

Are you having problems paying your mortgage bills each month? Perhaps you recently lost your job, and your monthly income has plummeted, or maybe you are receiving treatment for an illness or facing a costly divorce. Regardless of the reasons behind your financial challenges, several solutions can help to manage the problem.

To help deal with the no-longer affordable monthly mortgage payments, it may be beneficial to take specific considerations into account. You have the option of giving up your home and attempting a short sale and receiving cash immediately. However, if you would rather keep the house, it is possible to apply for mortgage loan modifications to lower the monthly payment amounts to a more affordable amount. Each of these options has benefits, but they also have challenges that need to be examined. This article will discuss the different benefits of a loan modification versus a short sale.

1. The Loan Modification

As a means of addressing foreclosure crisis across the United States, the federal government offered a Home Affordable Modification Program, also known as HAMP. According to HAMP, homeowners who are having difficulty meeting their mortgage payments can petition the mortgage lenders for relief in the form of smaller monthly mortgage bills.

Lenders can also reduce the homeowner’s payment amounts in different ways including the reduction of interest rates, reworking the terms of the property loan, and forgiving a portion of the homeowner’s principal balances. Certain lenders may even provide the homeowner with a break from the mortgage payments offering the struggling individual with the opportunity to regain control of finances and mortgage payments.

The primary benefit of the loan modification is that the homeowner will not lose their house and their financial credit rating will not suffer. In fact, it will continue to operate and present the homeowner with a good rating unlike ceasing making mortgage payments.

Unfortunately, there are certain disadvantages to HAMP, and these must also be taken into account before opting for the loan modification. According to the HAMP guidelines, for an individual to qualify, they must have obtained the mortgage loan before or on the 1st of January, 2009. Furthermore, the person must not owe more than $725,000 on their primary residence.

It is also necessary for the person to be employed for HAMP to apply. This is a significant challenge as many homeowners trying to modify loans will have lost their jobs. This means that if you do meet the eligibility requirements, there is no guarantee that the lenders will offer you the loan modification option.

2. Short Sale Realtor – Ruhl Team Short Sale

For individuals who cannot qualify for a mortgage loan qualification, short sales may be the best option. By utilizing a short sale, it is possible for the seller to accept a lower bid for the property in the hope that it will increase the chance of selling the home quickly. In the majority of cases, a lender will take a loss on short sales; however, some lenders agree to this option as a means of avoiding the hassle of foreclosure.