Distressed homeowners are under big pressure. They’re underwater, and they feel trapped. Desperation can lead to all kinds of bad decisions. Luckily, we’re here to help clear up some common misconceptions about your options.
Misconception #1: Foreclosure is the only option
Foreclosure is rarely the only option. The best case scenario is refinancing, for homeowners who can’t afford their loans, and the government has put various incentives in place to encourage banks to allow people to refinance. But if you can’t refinance or you need to move, short sales become an option. Foreclosure is definitely the option of last resort.
Misconception #2: Short sales are hard to get approved
In truth, your lender is often willing to work with you for a short sale, because the burdens of foreclosure can be quite high. However, you do only get one shot at a short sale, so you should definitely seek out a realtor who has experience in these matters.
Misconception #3: Lenders prefer foreclosures to short sales
Not in this economic climate. A foreclosure is an expensive legal undertaking. In addition, a property deteriorates rapidly when it’s uninhabited and the utilities are turned off, so unless the lender expects to be able to sell or rent it immediately, they can expect it to lose a great deal of value.
A short sale, on the other hand, is only discounted by about 30% over the value of the home, so if a short sale is successful, the lender gets at least some money in hand, whereas with a foreclosure they’re just as likely to get a white elephant.
If you’re in financial straits, you do have options. To discuss them with an experienced professional, call us today at 703-485-HOME or by email [email protected].
703-485-4663
