Losing your home due to the inability to make your mortgage payments is quite possibly the worst financial scenario you could ever find yourself facing. truthfully, a foreclosure puts a huge blemish on your credit report, where improving it could take years. Further, 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.
Think about a Short Sale as a Smarter Credit Position
The pitfalls of a foreclosure are stomach turning and sometimes beyond repair. Hence, any choice that promises a way out of the situation is a no brainer. This process is one option for homeowners who are mired in financial turmoil. To be clear, a short sale involves selling your home at a price that is lower than the financed amount you owe the mortgage lender.
The best part about short sales is that they create a very good situation for everyone who is involved in the transactions:
* The seller is able to evade 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, high legal fees, of foreclosure and marketing the repossessed property
* The new 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 must take when settling your mortgage through this process is to get it in writing from the lender, clearly stating that all your debts are absolved. Other things to keep in mind to stay away from any possible negative consequences of the process are:
* Protect your credit rating: Do not forget that a short sale is listed on your credit report. This is why you want your lender to report it in the most positive light. For example, if your credit report merely states that the debt is satisfied, your credit score will not be drastically affected. On the other hand, if your lender reports you settled for less than the actual amount owed, your score will drop automatically.
* Seek out good tax information: A liability for taxes on a short sale surfaces when the bank claims that the debt forgiven should be shown as an income. A tax professional can assist you find alternatives to limit this cheap shot tax hit.
While a short sale is definitely a smarter choice to foreclosure on several grounds, a homeowner often has a hard time trying to convince the lender 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 soon as possible. The longer you wait, the greater the amount of arrears, and the less likely that the lender will be to accept 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 the transaction. However, this is a bit tricky and I would never suggest this strategy to anyone.
If you, or someone you know, is facing a foreclosure scenario you will want to have an experienced Realtor assist you in examining your choices. Certified short sale specialist and Scottsdale AZ Real Estate agent Jen Wehner has been the top producer for people who want to avoid foreclosure in Arizona for all Prudential real estate brokerages. There is no fee to speak to Jen and you can get feedback on what the best option is for you. Having experienced Realtor work with you could protect you, your home, and your financial future.
Think about a Short Sale as a Smarter Credit Position
The pitfalls of a foreclosure are stomach turning and sometimes beyond repair. Hence, any choice that promises a way out of the situation is a no brainer. This process is one option for homeowners who are mired in financial turmoil. To be clear, a short sale involves selling your home at a price that is lower than the financed amount you owe the mortgage lender.
The best part about short sales is that they create a very good situation for everyone who is involved in the transactions:
* The seller is able to evade 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, high legal fees, of foreclosure and marketing the repossessed property
* The new 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 must take when settling your mortgage through this process is to get it in writing from the lender, clearly stating that all your debts are absolved. Other things to keep in mind to stay away from any possible negative consequences of the process are:
* Protect your credit rating: Do not forget that a short sale is listed on your credit report. This is why you want your lender to report it in the most positive light. For example, if your credit report merely states that the debt is satisfied, your credit score will not be drastically affected. On the other hand, if your lender reports you settled for less than the actual amount owed, your score will drop automatically.
* Seek out good tax information: A liability for taxes on a short sale surfaces when the bank claims that the debt forgiven should be shown as an income. A tax professional can assist you find alternatives to limit this cheap shot tax hit.
While a short sale is definitely a smarter choice to foreclosure on several grounds, a homeowner often has a hard time trying to convince the lender 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 soon as possible. The longer you wait, the greater the amount of arrears, and the less likely that the lender will be to accept 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 the transaction. However, this is a bit tricky and I would never suggest this strategy to anyone.
If you, or someone you know, is facing a foreclosure scenario you will want to have an experienced Realtor assist you in examining your choices. Certified short sale specialist and Scottsdale AZ Real Estate agent Jen Wehner has been the top producer for people who want to avoid foreclosure in Arizona for all Prudential real estate brokerages. There is no fee to speak to Jen and you can get feedback on what the best option is for you. Having experienced Realtor work with you could protect you, your home, and your financial future.
About the Author:
Jen Wehner is an award winning Real Estate Agent located 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 personal blog here ARIZONA Real Estate AgentS
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