If you are underwater on your house, otherwise meaning that you owe a lot more money on your home than your home is valued at then you might not wish to continue paying your mortgage. Alternatively, the recent financial crisis may have led you to losing an income meaning that you're no longer able to pay your mortgage, whether you wish to or not.
If you're in a financial position to continue paying your mortgage then you might find yourself liable for the outstanding balance if you sell your house for an amount that doesn't cover your mortgage. If its your family house then you might wish to take the loss because after all, its still the same home irrespective of what monetary value others might put on it. Though if a move of house is required because of a new job, for instance, then a short sale might be needed meaning that you would require the assistance of a short sale realtor to help. What's more is that if after short selling your present house you agree to cover the outstanding loan amount, provided you are current on your mortgage you can well qualify for a loan which permits you to move into a newer, better home for the same amount.
If you cannot afford to keep your house, however, then a short sale might be the best choice available to you, particularly if the only option is foreclosure. Although a short sale still does not reflect favorably against your credit rating, it is still a better choice than foreclosure because lenders consider foreclosure to be more severe.
Lenders do not prefer to have empty properties on their books because it is an extra responsibility and makes their books look bad. Foreclosure can even be an expensive procedure in terms of paperwork and litigation, meaning that they would much rather opt for an alternative if one is available.
If you do allow your home to go into foreclosure, then you may not be able to purchase another home for 5-7 years and your record is probably to lead to potential future lenders to charge a higher interest rate because they consider you to be a high risk.
With a short sale that came about because you could no longer afford the house, you'll need to wait for 2 years to purchase a home but then that's unlikely to be a major consideration how is have financial difficulty. The interest rates that you're charged in the future may even be preferential to those after a foreclosure, though that will depend on your individual circumstances and the lender involved.
What is certain is that a short sale is certainly a better option than allowing your property going into foreclosure. Although your lender may not be entirely happy with a short sale, they'll at least recognize that you made an effort and tried to reach the best settlement agreement possible rather than just abandoning your commitment. Not just would this help your odds of being approved for a mortgage in the future, it may even assist you to get that loan at a lower interest rate.
If you're in a financial position to continue paying your mortgage then you might find yourself liable for the outstanding balance if you sell your house for an amount that doesn't cover your mortgage. If its your family house then you might wish to take the loss because after all, its still the same home irrespective of what monetary value others might put on it. Though if a move of house is required because of a new job, for instance, then a short sale might be needed meaning that you would require the assistance of a short sale realtor to help. What's more is that if after short selling your present house you agree to cover the outstanding loan amount, provided you are current on your mortgage you can well qualify for a loan which permits you to move into a newer, better home for the same amount.
If you cannot afford to keep your house, however, then a short sale might be the best choice available to you, particularly if the only option is foreclosure. Although a short sale still does not reflect favorably against your credit rating, it is still a better choice than foreclosure because lenders consider foreclosure to be more severe.
Lenders do not prefer to have empty properties on their books because it is an extra responsibility and makes their books look bad. Foreclosure can even be an expensive procedure in terms of paperwork and litigation, meaning that they would much rather opt for an alternative if one is available.
If you do allow your home to go into foreclosure, then you may not be able to purchase another home for 5-7 years and your record is probably to lead to potential future lenders to charge a higher interest rate because they consider you to be a high risk.
With a short sale that came about because you could no longer afford the house, you'll need to wait for 2 years to purchase a home but then that's unlikely to be a major consideration how is have financial difficulty. The interest rates that you're charged in the future may even be preferential to those after a foreclosure, though that will depend on your individual circumstances and the lender involved.
What is certain is that a short sale is certainly a better option than allowing your property going into foreclosure. Although your lender may not be entirely happy with a short sale, they'll at least recognize that you made an effort and tried to reach the best settlement agreement possible rather than just abandoning your commitment. Not just would this help your odds of being approved for a mortgage in the future, it may even assist you to get that loan at a lower interest rate.
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