Guest blog by Lisa Birdsong SFR, Keller Williams Realty
As the number of foreclosures in the nation continues to rise, many homeowners with hardships have learned that doing a short sale on their home can relieve the stress of facing foreclosure.
What is a short sale? A short sale is a sales transaction in which the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan.
Why would a lender agree to a short sale? Most lenders do not want to foreclose on properties, therefore, they would prefer to agree to a short sale and obtain a majority of the loan amount while avoiding excessive legal fees. In fact, CitiMortgage has even recommended that their delinquent borrowers consider a short sale.
Does a short sale damage my credit? Yes. Any time you are late on a payment or in default of a loan, it is documented on your credit report. However, a foreclosure has a much greater impact on your credit. Typically, lenders will not consider giving you a home loan for 7-10 years after a foreclosure, whereas a short sale may only negatively impact you for 5 years.
Making Homes Affordable is designed to assist homeowners facing foreclosure. There is a wealth of information on the site, a hotline and information to help you avoid foreclosure scams. Short sales are not the only option to avoid foreclosure, and in fact, it’s only an option if you’re facing a hardship. If your home is underwater (worth less than you owe), that is not considered a hardship – but you might still be available for another type of assistance.
There is tremendous benefit to working with a qualified real estate professional if you intend to short sale your home. It is a stringent process, and their experience will be of great use to you. Each homeowner’s case is different and I highly recommend that you consult with a real estate attorney and tax attorney before entering into the prospect of either a short sale or foreclosure. A real estate professional is vital to have in your corner, but we are not licensed to give legal advice.
If you’re facing the prospect of foreclosure on your North Texas home – contact me today. Let’s discuss your options.
IMPORTANT NOTICE: Lisa Birdsong and/or Keller Williams Realty are not associated with the government in any way and our services are not approved by the government or your lender. Using our services does not guarantee that your lender will agree to change your loan or allow you to short sale your home. If you stop paying your mortgage, you could lose your home and damage your credit rating.
Michelle Castle provides mortgage loans to all of North Texas and Southern Oklahoma. Call Michelle Castle at (903) 892-1998 if you are looking for a home loan in North Texas and Southern Oklahoma.