Are you having trouble paying your mortgage? Is there a chance your home may go into foreclosure? If so, you may be a good candidate for a short sale. This is when a property is sold for less than the balance owed on the mortgage—it can be a win-win for many sellers who want to avoid foreclosure and lenders who want to cut their losses as much as possible. When deciding if this is a feasible option for you, it can be very helpful to enlist the help of a certified short sale expert.
It’s important to be aware that a short sale may not entirely save your credit score. While it can be better than having a foreclosure on your record, a short sale will still be recorded as a not “paid as agreed” account and factor into your FICO score.
When proceeding with a short sale, it’s important to determine whether if it will cancel all the remaining debt on the mortgage or not. There are two elements of a mortgage: 1) Your promise to pay the lender and 2) the lien on your property. So when you can’t pay your lender, they have the right to sell the property to pay off the loan. When a lender approves a short sale, they agree to release the lien on the property but may not necessarily cancel the seller’s obligation to repay the balance of the loan. You’ll need to enlist the help of a professional to get through all the fine print and ensure that the lender does not reserve their right to collect the remaining debt balance. The key to this part of the process is to find out in advance if your lender will let you off the hook for the rest of the mortgage payments and to get their answer in writing.
At this point, you should be able to decide if a short sale is the best option for you. If it is, then start looking for a certified short sale expert right away so that you can get the property on the market as soon as possible.
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