Losing your home due to the inability to make your mortgage payments is perhaps the worst financial scenario you could ever face. truthfully, 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 against you as part of the foreclosure action. Having gone through the foreclosure it will certainly dampen your ability to secure any kind of credit, leaving you with no credit.
Consider a Short Sale as a Better Credit Position
The downfalls of a foreclosure are scary and often beyond repair. Therefore, any choice that offers a solution to the foreclosure is a better choice. This process is one choice for property owners who are mired in financial turmoil. To be clear, a short sale involves selling your home at a price that is lower than the amount you owe the mortgage lender.
A nice component with short sales is that they create a win-win-win scenario for everyone who is involved in the transactions:
* The seller is able to stave off foreclosure and get their loan paid off.
* The bank is able to get paid a portion of the loan back without going through all the drawn out litigation process, costly attorney expenses, of foreclosure and re-selling of the home
* The new buyer is able to buy the property at a reduced price.
Thinking about Doing a Short Sale? Keep the Following Factors in Mind
The first safeguard measure you should take when settling your mortgage through this process is to get a written acknowledgment from the lender, clearly stating that all your debts are forgiven. Other considerations to bear in mind to avoid any potential negative consequences of the process are:
* Guard your FICO Score: Do not forget that this transaction is listed on your credit report. This is why you want your bank to report it in the most positive light. For example, if your report merely states that the debt is satisfied, your score will not be impacted. On the flip side, if your bank reports you closed out for less than the actual amount owed, your score will drop automatically.
* Get tax information: A tax liability on a short sale arises when the bank claims that the debt released should be treated as an income. A tax attorney can assist you find alternatives to limit this liability.
While a short sale is definitely a superior alternative to going through foreclosure on several grounds, a borrower often struggles to convince the bank to agree to them right away. This is because the lender has to accept to forgo a part of the mortgage claim that they want to recover. Therefore, when faced with a financial crunch, a short sale must be pursued as quickly as possible. The longer you delay, the greater the amount of arrears, and the less likely that the bank will be to agree to the process. With that in mind, I have seen homeowners stay in their properties for several months without making their loan payments and still complete a successful transaction. Of course this is a bit tricky and I would never suggest this strategy to a client.
If you, or someone you know, is facing a foreclosure situation you will want to have a seasoned professional help you in examining your choices. Certified short sale expert and Scottsdale AZ Real Estate agent Jen Wehner has been the top producer for short sale clients in the State of Arizona for all Prudential real estate brokerages. There is no fee to talk to Jen and you can get feedback on what the best strategy is for you. Having experienced Realtor work with you could shield you, your credit standing, and your financial future.
Consider a Short Sale as a Better Credit Position
The downfalls of a foreclosure are scary and often beyond repair. Therefore, any choice that offers a solution to the foreclosure is a better choice. This process is one choice for property owners who are mired in financial turmoil. To be clear, a short sale involves selling your home at a price that is lower than the amount you owe the mortgage lender.
A nice component with short sales is that they create a win-win-win scenario for everyone who is involved in the transactions:
* The seller is able to stave off foreclosure and get their loan paid off.
* The bank is able to get paid a portion of the loan back without going through all the drawn out litigation process, costly attorney expenses, of foreclosure and re-selling of the home
* The new buyer is able to buy the property at a reduced price.
Thinking about Doing a Short Sale? Keep the Following Factors in Mind
The first safeguard measure you should take when settling your mortgage through this process is to get a written acknowledgment from the lender, clearly stating that all your debts are forgiven. Other considerations to bear in mind to avoid any potential negative consequences of the process are:
* Guard your FICO Score: Do not forget that this transaction is listed on your credit report. This is why you want your bank to report it in the most positive light. For example, if your report merely states that the debt is satisfied, your score will not be impacted. On the flip side, if your bank reports you closed out for less than the actual amount owed, your score will drop automatically.
* Get tax information: A tax liability on a short sale arises when the bank claims that the debt released should be treated as an income. A tax attorney can assist you find alternatives to limit this liability.
While a short sale is definitely a superior alternative to going through foreclosure on several grounds, a borrower often struggles to convince the bank to agree to them right away. This is because the lender has to accept to forgo a part of the mortgage claim that they want to recover. Therefore, when faced with a financial crunch, a short sale must be pursued as quickly as possible. The longer you delay, the greater the amount of arrears, and the less likely that the bank will be to agree to the process. With that in mind, I have seen homeowners stay in their properties for several months without making their loan payments and still complete a successful transaction. Of course this is a bit tricky and I would never suggest this strategy to a client.
If you, or someone you know, is facing a foreclosure situation you will want to have a seasoned professional help you in examining your choices. Certified short sale expert and Scottsdale AZ Real Estate agent Jen Wehner has been the top producer for short sale clients in the State of Arizona for all Prudential real estate brokerages. There is no fee to talk to Jen and you can get feedback on what the best strategy is for you. Having experienced Realtor work with you could shield you, your credit standing, and your financial future.
About the Author:
Jen Wehner is an top producing Realtor based in Scottsdale Arizona. If you would like to learn more about buying or selling homes in Arizona, click here SCOTTSDALE REAL ESTATE or you can visit Jen's real estate blog here ARIZONA REALTORS
No comments:
Post a Comment