Reasons Why A Short Sale Is Better Than A Foreclosure
It’s a situation no one wants, but an increasing number of Americans are now facing: you’ve fallen behind on your mortgage payments and see no way out of this hole. Relax: foreclosure is not your only option. Many people faced with this difficult situation manage to get out through a process known as a short sale. In this article, we will cover a few of the most common reasons for making a short sale; and then discuss the reasons why, for many homeowners, a short sale is preferable to foreclosure.
So…what exactly is a short sale?
In a short sale, a financially distressed homeowner and his/her lender agree upon a mutually beneficial deal. The homeowner gives up possession of their house, while the lender agrees to accept a payment of less than is actually owed on the mortgage. Although losing your home is obviously never an ideal situation, there are a few benefits to short sales that should definitely be considered.’
Why would I make a short sale?
If you are falling behind on your mortgage payments, and if foreclosure is starting to look like a serious threat, then a short sale might be the best way to avoid this potentially messy situation. Here are the two most important reasons to consider making a short sale.
- Avoid that nasty “F” word. Nobody wants to deal with the long and drawn out foreclosure process. Additionally, foreclosure comes with a lot of social stigma. Not to mention the financial stigma…
- Protect your credit. In the short term, a short sale may be slightly better for your credit than a foreclosure. This depends in large part on how your lender reports the event to the major credit agencies. No matter what the immediate result on your credit, however, short sales will leave you with some important advantages when it comes to rebuilding your financial reputation.
- Protect your financial “good name.” If you choose a short sale, you will be eligible to buy a new home after 2 years under Fannie Mae guidelines rather than after 5. Not surprisingly, this can make a big difference in your ability to get “back on track.”
- Future loan applications. Once you do get back on track, you may very well wish to buy another home someday. This might seem far off in the moment that you are stressing about foreclosure, but it’s important to keep your options open. Short sales offer another key advantage in this regard: it is not obligatory to report short sales on future loan applications.
Want to learn more?
Here at Blue Marble Properties, we can help you make a quick short sale in order to avoid foreclosure! One of the key obstacles to short sales is finding a buyer who is willing to buy fast and to pay in cash. We make our business doing exactly that! Contact us today for more information on how we can work together. We look forward to hearing from you!