If you’re underwater on your home but have to move, or you’re at risk of foreclosure, you’re no doubt feeling stressed and overwhelmed. Your options might seem limited but knowing the drawbacks and benefits to each option will make the decision easier.
If you’re deeply underwater or facing foreclosure, a short sale is an option. A short sale is when you sell your home for less than the remainder owing on your mortgage. The lender must agree to this, but with the rate of foreclosures over the last several years, more and more lenders are becoming open to short sales.
Some Benefits To Short Sales
- Less damage to your credit. There’s still damage, mostly associated with being in arrears to your mortgage lender, but the damage is less severe and more easily repaired than a foreclosure.
- Allows you to qualify for another mortgage sooner. You can apply for a Fannie Mae mortgage in as little as two years after a short sale, as compared to 7 years with a foreclosure.
- Your remaining debt may be erased completely. Depending on your lender (Fannie Mae and Freddie Mac are two) the remainder of your mortgage may be forgiven after a short sale.
- It’s private. Foreclosures can be humiliating. A short sale looks just like any other listing, so the neighbors won’t know.
- No out-of-pocket expenses. All these are paid by the lender.
- Special provisions for military. If you’re in the military and receive a Permanent Change of Station (PCS) order, a new ruling expedites the short sale process if you are underwater with your mortgage.
(Source: http://www.prweb.com/releases/FHFA-short-sale-policy/veterans/prweb9651272.htm)
If you need to sell or are facing foreclosure, a short sale may be right for you. To discuss your options, please contact Northern Virginia’s #1 Real Estate Solution by calling us at 703-485-HOME or by email [email protected].
703-485-4663
