Is a Short Sale Right for You
discusses a short sale. Can you qualify for one? Will it affect your credit?
Have you ever heard of the term “short sale”? If you owe more than your home is worth and are considering a foreclosure,
you may have other options. Usually if you cannot pay your monthly house a foreclosure might not be too far off in the distance. If you qualify, a short sale may be for you. There are some similarities and differences between the two. Here are some basic points highlighted below.
First of all before we get started, only an attorney can give you legal advice. If your friends offer their opinion, take it for just that. Don’t assume a friend is offering you sound advice. Consult an attorney if you have need answers.
For example, assume that you owe $300,000 dollars on your remaining mortgage balance. However, you cannot afford the monthly payments and the market value of your home is $285,000. That is a difference of $15,000. Well a short sale may fit your specific situation. The lender will take the loss and your credit will be affected unless you can come up with $15,000.
The lender will have to approve the short sale. There are a number of qualifications that you will have to pass through. These include but are not limited to the market value of a home declining, the mortgage is about to default or already is in default status, and the seller cannot make the monthly payments.
Sometimes the lender takes so long that the future buyers decide to back out. It may take several months for the lender to approve the short sale. And this can anger many potential buyers who are set into moving into their home as quickly possible. If the lender does not approve the short sale then it will not occur. There are not guarantees that the lender will approve it.
Negative Consequences of
For starters, your credit score will fall. The only way it won’t is if the lender does not report it to one of the credit bureaus. Many professionals state that your score may fall 200 points or more.
The main advantage regarding a short sale is that buyers may only have to wait a couple years compared to a foreclosure.
