Losing your home due to the inability to make your mortgage payments is perhaps the most devastating financial scenario you could ever face. truthfully, a foreclosure puts a huge blemish on your credit report, where improving it could take several years. Moreover, a mortgage lender may file a lawsuit versus you as part of the foreclosure process. Having gone through the foreclosure it will certainly dampen your ability to secure any kind of loan, leaving you without the ability to obtain new credit.
Consider a Short Sale as a Better Credit Decision
The downfalls of a foreclosure are devastating and often irreparable. Hence, any choice that offers a solution to the foreclosure is a better alternative. A short sale is one option for homeowners who are buried in financial woes. To be clear, a short sale involves selling your property at a price that is below the amount you owe the bank.
A nice component with short sales is that they create a win-win-win situation for everyone who is involved in the transactions:
* The property owner is able to stave off foreclosure and get their loan paid off.
* The bank is able to recover his dues without going through all the lengthy legal procedure, costly attorney expenses, of foreclosure and marketing the repossessed property
* The new home buyer is able to purchase the home at a lower price.
Thinking about Doing a Short Sale? Keep the Following Things in Mind
The first safety measure you must take when settling your loan payoff through this process is to get it in writing from the lender, clearly stating that all your debts are wiped clean. Other things to keep in mind to stay away from any potential negative consequences of the process are:
* Protect your FICO Score: Do not forget that a short sale is mentioned on your credit report. This is why you want your bank to report it favorably. For instance, if your report merely states that the debt is satisfied, your credit score will not be impacted. On the other hand, if your bank reports you settled for less than the full balance, your score will take a huge drop.
* Seek out good tax information: A tax liability on a short sale surfaces when the bank claims that the amount of debt forgiven should be shown as an income. A tax attorney can assist you find alternatives to limit this cheap shot tax hit.
While a short sale is certainly a smarter choice to foreclosure on several grounds, a borrower often struggles to convince the bank to agree to them right away. This is because the bank has to accept to forgo a part of the mortgage claim that they want to recover. Therefore, when faced with a financial crunch, a short sale must be executed as quickly as possible. The longer you delay, the larger the amount of arrears, and the less likely that the bank will be to accept the process. With that said, I have seen homeowners stay in their properties for several months without making their loan payments and still complete the transaction. However, this is a bit tricky and I would never suggest this strategy to anyone.
If you, or someone you know, is facing a foreclosure situation you will want to have a seasoned professional assist you in examining your options. Certified short sale specialist and Scottsdale AZ Real Estate agent Jen Wehner has been the top producer for people who want to avoid foreclosure in Arizona for all Prudential real estate brokerages. There is no fee to speak to Jen and you can get advice on what the best option is for you. Having experienced Realtor work with you could guard you, your house, and your financial future.
Consider a Short Sale as a Better Credit Decision
The downfalls of a foreclosure are devastating and often irreparable. Hence, any choice that offers a solution to the foreclosure is a better alternative. A short sale is one option for homeowners who are buried in financial woes. To be clear, a short sale involves selling your property at a price that is below the amount you owe the bank.
A nice component with short sales is that they create a win-win-win situation for everyone who is involved in the transactions:
* The property owner is able to stave off foreclosure and get their loan paid off.
* The bank is able to recover his dues without going through all the lengthy legal procedure, costly attorney expenses, of foreclosure and marketing the repossessed property
* The new home buyer is able to purchase the home at a lower price.
Thinking about Doing a Short Sale? Keep the Following Things in Mind
The first safety measure you must take when settling your loan payoff through this process is to get it in writing from the lender, clearly stating that all your debts are wiped clean. Other things to keep in mind to stay away from any potential negative consequences of the process are:
* Protect your FICO Score: Do not forget that a short sale is mentioned on your credit report. This is why you want your bank to report it favorably. For instance, if your report merely states that the debt is satisfied, your credit score will not be impacted. On the other hand, if your bank reports you settled for less than the full balance, your score will take a huge drop.
* Seek out good tax information: A tax liability on a short sale surfaces when the bank claims that the amount of debt forgiven should be shown as an income. A tax attorney can assist you find alternatives to limit this cheap shot tax hit.
While a short sale is certainly a smarter choice to foreclosure on several grounds, a borrower often struggles to convince the bank to agree to them right away. This is because the bank has to accept to forgo a part of the mortgage claim that they want to recover. Therefore, when faced with a financial crunch, a short sale must be executed as quickly as possible. The longer you delay, the larger the amount of arrears, and the less likely that the bank will be to accept the process. With that said, I have seen homeowners stay in their properties for several months without making their loan payments and still complete the transaction. However, this is a bit tricky and I would never suggest this strategy to anyone.
If you, or someone you know, is facing a foreclosure situation you will want to have a seasoned professional assist you in examining your options. Certified short sale specialist and Scottsdale AZ Real Estate agent Jen Wehner has been the top producer for people who want to avoid foreclosure in Arizona for all Prudential real estate brokerages. There is no fee to speak to Jen and you can get advice on what the best option is for you. Having experienced Realtor work with you could guard you, your house, and your financial future.
About the Author:
Jen Wehner is an top producing Real Estate Agent based in Scottsdale Arizona. If you would like to learn more about buying or selling homes in Arizona, click here SCOTTSDALE REAL ESTATE or you can visit Jen's personal blog here ARIZONA Real Estate AgentS
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