If you’re currently in a situation where you owe more on your home than what it is worth, which in this economy is more common than ever, or have been unable to refinance or even denied a loan modification; a short sale can be a fantastic alternative if you’re facing foreclosure or are considering walking away from your home.
When we talk about a short sale, the goal is that your lender agrees to accept a pay off that is lower than your current mortgage debt balance. For example, if you current mortgage balance is $295,000 but your house is only worth $195,000, the goal is to get your mortgage lender to agree forgive the negative difference of $100,000.
Going through with a short sale has many benefits for home owners who are under water or have adjustable rate mortgages than they can no longer afford to pay.
Just watch the news and these days and it’s not uncommon to hear about regular people doing crazy things due to the overwhelming stress of a pending foreclosure. If you are no longer able to make your mortgage payments due to unemployment, illness or had an adjustable interest rate mortgage that rocketed sky high, then it’s time to talk to an expert about the short sale option.
Under a short sale, your lender understands that you’re trying to sell your home at its current market value. Chances are good that they’ll agree to go that route simply because if they foreclose on your loan they would end up spending a lot of money on legal fees and ultimately end up selling the home at current market prices anyway. As a result of this, most lenders are likely to agree to a short sale because it simply makes sense financially to their bottom line when compared to the legal and overhead fees of a foreclosure.
Your credit takes a real hit when going through a foreclosure. A short sale will also cause some damage to your credit but due to the rising amount of short sales most lenders are backing off on credit guidelines for those that have a short sale on their record. As a matter of fact, the effects of a short sale can be negotiated with your bank or lender as part of the short sale agreement.
So if you’re in a position where a short sale is a good alternative, then it’s well worth a phone call or an email to learn more about it. American Realty Group is always standing by; ready to go over your options with you and help you understand how it would work for your situation.