The Benefits of Short Sales
The Benefits of Short Sales
If you currently owe more on your home than what its worth, have been unable to refinance or were denied a loan modification; a short sale can be a great alternative if you are facing foreclosure or are seriously considering walking away from your home.
In a short sale your current mortgage lender agrees to accept a pay off that is significantly lower than your current mortgage debt balance. For instance, if you current mortgage balance is $400,00 but your house is only worth $300,000, your mortgage lender agrees to forgive the negative difference of $100,000.
A short sale can have many benefits for borrowers who are upside down or have adjustable rate mortgages than they can no longer afford.
Avoid Foreclosure Stress
Turn on your favorite news broadcast these days and you will see plenty of people doing crazy things due the stress that a pending foreclosure brings on to them. If you are no longer able to make your house payments due to unemployment, illness or had an adjustable interest rate mortgage that rocketed sky high, then you need to request a short sale from your current lender.
Lender Cooperation
When you request a short sale your lender is more than likely to cooperate with your and your real estate broker. Under a short sale your lender knows that you are trying to sell your house at its current market value. They will most likely agree to do this simply because if they foreclose on your loan they would have to spend thousands on legal fees and would end up selling the home at current market prices anyway. As a result of this, most lenders are likely to agree to a short sale because it simply makes sense financially to their bottom line when compared to the legal fees of a foreclosure.
Reduce Damage to Your Credit
A foreclosure can cause significant damage to your credit. A short sale will also cause some damage to your credit but due to the prevalence of short sales most lenders are easing on credit guidelines for those that have a short sale on their credit. The effects of a short sale can be negotiated with your bank or lender as part of the short sale agreement.
Get a Fresh Start
A short sale is a great alternative that can help consumers that are facing difficulties paying their mortgage or can no longer afford their home. It allows the borrower to get a fresh start with a more affordable home. If you qualify for the HAFA (Home Affordable Foreclosure Alternatives) program you may even receive up to $3000 to help you find new housing. In addition to moving expenses the H.A.F.A. Requires that your lender approve your short sale within 30 days and stop all foreclosure proceedings.
Deed In Lieu
If after marketing your home for a reasonable amount of time and it doesn't sell then your lender may give you the option to sing the house back to the lender instead of a foreclosure, referred to as a deed in lieu of foreclosure.
With the many options that are currently available to distressed homeowners a short sale offers many benefits to distressed homeowners.
Los Angeles Short Sales
http://ekvfinancial.com/real-estate-short-sales
