Three Benefits of a Short Sale

Three Benefits of a Short Sale

For many struggling homeowners, the fear of losing their home to foreclosure is very real. Sleepless nights spent worrying about what to do, fretting over how to make that next mortgage payment and wondering what would happen to their family should they fail to do so can be overwhelming.

Ultimately, a home in default will be taken by the mortgage lender, and the homeowners will be forced out. This is a consequence of foreclosure. Another effect is the inability of an individual who has lost a home to buy another for no less than seven years. Foreclosures are a matter of public record, and so someone with a security-sensitive job could find their employment affected in addition. The good news is there are options to foreclosure.

One of those options is known as a short sale. This kind of real estate sale is when a home is sold for less than what is owed on the character, and it is a dignified and responsible way to walk away. There are three benefits to homeowners who can no longer provide to make their mortgage payment.

The first assistance of a short sale is it allows a homeowner more time to keep in the home during the time of action. When a homeowner has been approved to participate in a short sale, the lender wants them to stay living in the character until the home is sold. The lender will also postpone any foreclosure activity, and they will not expect any mortgage payments while the homeowner is in the home. The amount of time varies, but generally most take 6 to nine months to complete.

A second assistance is the possible to receive financial compensation from the mortgage company by completing a short sale. These monies are sometimes called ‘relocation allowance’ or ‘short sale seller motive’, and the dollar amount can range anywhere from $750 to $30,000, depending on the mortgage company and the kind of workout program. This money is paid directly to the homeowner at closing.

The third assistance to a short sale is the forgiveness of the mortgage debt. In a foreclosure carried out in a deficiency state, a homeowner could lose the home to the bank and nevertheless end up owing the mortgage debt on the loan. By completing a short sale, the lender agrees to forgive any remaining mortgage amount after the sale.

A short sale may not be the solution for every homeowner struggling with their mortgage. In some situations, a loan alteration or a forbearance plan can be a better answer, but if you are unable to continue your mortgage payments, a short sale does provide a dignified way for you to leave your home and walk away from a mountain of mortgage debt.

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