Losing your home due to the inability to meet the monthly payment obligations is quite possibly the worst financial scenario you could ever face. truthfully, a foreclosure puts a big negative mark on your credit report, where improving it could take years. Moreover, a mortgage lender may file a lawsuit versus 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.
Think about a Short Sale as a Better Credit Position
The pitfalls of a foreclosure are stomach turning and sometimes irreparable. Therefore, any option that promises a way out of the situation is a no brainer. This process is one choice for property owners who are buried in money problems. Simply put, a short sale means you sell your property 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 very good scenario for all parties involved in the transactions:
* The seller is able to avoid foreclosure and get their loan paid off.
* The bank is able to recover his dues without going through all the long litigation process, costly attorney expenses, of foreclosure and marketing the repossessed property
* The buyer is able to purchase the home at a lower price.
Considering a Short Sale? Keep the Following Factors in Mind
The first safeguard measure you should take when negotiating your loan payoff through this process is to get it in writing from the lender, stating that all your debts are forgiven. Other considerations to bear in mind to stay away from any possible negative consequences of the process are:
* Guard your FICO Score: Do not forget that a short sale is mentioned on your credit report. This is why you want your bank to report it in a way that is advantageous to you. For instance, if your report merely states that the loan is satisfied, your score will not be impacted. On the other hand, if your lender reports you closed out for less than the full balance, your score will take a huge drop.
* Seek out good tax advice: A liability for taxes on a short sale surfaces when the lender claims that the debt released should be treated as an income. A tax attorney can help you find alternatives to limit this liability.
While a short sale is definitely a smarter choice to going through foreclosure on several grounds, a homeowner often struggles to convince the lender 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 tight financial situation, a short sale must be executed as quickly as possible. The longer you put it off, the larger the amount of arrears, and the less likely that the lender will be to agree to the process. With that said, I have seen people live in their homes for several months without making their loan payments and still complete a successful transaction. However, this is a bit risky and I would never recommend this strategy to anyone.
If you, or someone you know, are looking at a foreclosure situation you will want to have an experienced Realtor assist you in exploring 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 speak to Jen and you can get feedback on what the best choice is for you. Having experienced Realtor work with you could protect you, your house, and your financial future.
Think about a Short Sale as a Better Credit Position
The pitfalls of a foreclosure are stomach turning and sometimes irreparable. Therefore, any option that promises a way out of the situation is a no brainer. This process is one choice for property owners who are buried in money problems. Simply put, a short sale means you sell your property 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 very good scenario for all parties involved in the transactions:
* The seller is able to avoid foreclosure and get their loan paid off.
* The bank is able to recover his dues without going through all the long litigation process, costly attorney expenses, of foreclosure and marketing the repossessed property
* The buyer is able to purchase the home at a lower price.
Considering a Short Sale? Keep the Following Factors in Mind
The first safeguard measure you should take when negotiating your loan payoff through this process is to get it in writing from the lender, stating that all your debts are forgiven. Other considerations to bear in mind to stay away from any possible negative consequences of the process are:
* Guard your FICO Score: Do not forget that a short sale is mentioned on your credit report. This is why you want your bank to report it in a way that is advantageous to you. For instance, if your report merely states that the loan is satisfied, your score will not be impacted. On the other hand, if your lender reports you closed out for less than the full balance, your score will take a huge drop.
* Seek out good tax advice: A liability for taxes on a short sale surfaces when the lender claims that the debt released should be treated as an income. A tax attorney can help you find alternatives to limit this liability.
While a short sale is definitely a smarter choice to going through foreclosure on several grounds, a homeowner often struggles to convince the lender 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 tight financial situation, a short sale must be executed as quickly as possible. The longer you put it off, the larger the amount of arrears, and the less likely that the lender will be to agree to the process. With that said, I have seen people live in their homes for several months without making their loan payments and still complete a successful transaction. However, this is a bit risky and I would never recommend this strategy to anyone.
If you, or someone you know, are looking at a foreclosure situation you will want to have an experienced Realtor assist you in exploring 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 speak to Jen and you can get feedback on what the best choice is for you. Having experienced Realtor work with you could protect you, your house, and your financial future.
About the Author:
Jen Wehner is an award winning Real Estate Agent based 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 real estate blog here ARIZONA Real Estate AgentS
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