Losing your home due to the inability to meet the monthly payment obligations is quite possibly the worst financial situation you could ever find yourself facing. In fact, a foreclosure puts a huge blemish on your credit report, where recovering from it could take several years. Moreover, a mortgage lender may file a legal case versus you as part of the foreclosure process. Having gone through the foreclosure it will certainly dampen your ability to secure any kind of loan, leaving you without the ability to obtain new credit.
Consider a Short Sale as a Better Credit Decision
The pitfalls of a foreclosure are stomach turning and often irreparable. Hence, any option that offers a solution to the foreclosure is certainly worth considering. This process is one option for homeowners who are mired in financial woes. To be clear, a short sale means you sell your property at a price that is below the financed amount you owe the bank.
A nice component with short sales is that they create a very good scenario for everyone who is involved in the transactions:
* The property owner is able to evade foreclosure and payoff their mortgage liability.
* The bank is able to get paid a portion of the loan back without going through all the drawn out legal procedure, costly attorney expenses, of foreclosure and marketing the repossessed property
* The buyer is able to buy the home at a reduced price.
Thinking about Doing a Short Sale? Keep the Following Things in Mind
The first safety measure you should take when negotiating your loan payoff through this process is to get a written acknowledgment from the bank, stating that all your debts are wiped clean. Other considerations to bear in mind to stay away from any possible negative consequences of the process are:
* Protect your FICO Score: Do not forget that a short sale is listed on your credit report. This is why you want your bank to report it favorably. For instance, if your report simply states that the loan is satisfied, your credit score will not be impacted. On the flip side, if your bank reports you settled for less than the full balance, your FICO score will take a huge drop.
* Seek out good tax information: A liability for taxes on a short sale surfaces when the lender claims that the amount of debt released should be shown as an income. A tax attorney can assist you make some choices to limit this liability.
While a short sale is certainly a smarter choice to going through foreclosure on several grounds, a homeowner often struggles to convince the bank to agree to them right away. This is because the lender has to agree to forgo a part of the mortgage claim that they want to recover. Therefore, when faced with a tight financial situation, a short sale must be executed as quickly as possible. The longer you delay, the larger the amount of arrears, and the less likely that the lender will be to accept the process. With that in mind, I have seen people live in their properties for several months without making their mortgages and still complete a successful transaction. Of course this is a bit risky and I would never suggest this strategy to a client.
If you, or someone you know, are looking at a foreclosure situation you will want to have a seasoned professional assist you in exploring your strategies. Certified short sale expert and Scottsdale AZ Real Estate agent Jen Wehner has been the top producer for people who want to avoid foreclosure in the State of Arizona for all Prudential real estate brokerages. There is no fee to speak to Jen and you can get feedback on what the best route is for you. Having an expert work with you could protect you, your house, and your financial future.
Consider a Short Sale as a Better Credit Decision
The pitfalls of a foreclosure are stomach turning and often irreparable. Hence, any option that offers a solution to the foreclosure is certainly worth considering. This process is one option for homeowners who are mired in financial woes. To be clear, a short sale means you sell your property at a price that is below the financed amount you owe the bank.
A nice component with short sales is that they create a very good scenario for everyone who is involved in the transactions:
* The property owner is able to evade foreclosure and payoff their mortgage liability.
* The bank is able to get paid a portion of the loan back without going through all the drawn out legal procedure, costly attorney expenses, of foreclosure and marketing the repossessed property
* The buyer is able to buy the home at a reduced price.
Thinking about Doing a Short Sale? Keep the Following Things in Mind
The first safety measure you should take when negotiating your loan payoff through this process is to get a written acknowledgment from the bank, stating that all your debts are wiped clean. Other considerations to bear in mind to stay away from any possible negative consequences of the process are:
* Protect your FICO Score: Do not forget that a short sale is listed on your credit report. This is why you want your bank to report it favorably. For instance, if your report simply states that the loan is satisfied, your credit score will not be impacted. On the flip side, if your bank reports you settled for less than the full balance, your FICO score will take a huge drop.
* Seek out good tax information: A liability for taxes on a short sale surfaces when the lender claims that the amount of debt released should be shown as an income. A tax attorney can assist you make some choices to limit this liability.
While a short sale is certainly a smarter choice to going through foreclosure on several grounds, a homeowner often struggles to convince the bank to agree to them right away. This is because the lender has to agree to forgo a part of the mortgage claim that they want to recover. Therefore, when faced with a tight financial situation, a short sale must be executed as quickly as possible. The longer you delay, the larger the amount of arrears, and the less likely that the lender will be to accept the process. With that in mind, I have seen people live in their properties for several months without making their mortgages and still complete a successful transaction. Of course this is a bit risky and I would never suggest this strategy to a client.
If you, or someone you know, are looking at a foreclosure situation you will want to have a seasoned professional assist you in exploring your strategies. Certified short sale expert and Scottsdale AZ Real Estate agent Jen Wehner has been the top producer for people who want to avoid foreclosure in the State of Arizona for all Prudential real estate brokerages. There is no fee to speak to Jen and you can get feedback on what the best route is for you. Having an expert work with you could protect you, your house, and your financial future.
About the Author:
Jen Wehner is an award winning Realtor located in Scottsdale Arizona. If you would like to discover more about buying or selling homes in Arizona, click here SCOTTSDALE REAL ESTATE or you can visit Jen's personal blog here ARIZONA REALTORS