Starting a short sale on your home can be a tough decision. However, there are positives to a short sale that can help homeowners who are in financial distress. Continue reading to discover the top four benefits of short selling your property.
Own a Home Again Sooner
A short sale can prohibit you from getting a mortgage for two to three years, but a foreclosure or bankruptcy can prevent you from qualifying for new home loans for seven to ten years. Provided you haven't gone into default on your previous mortgage, the Federal Housing Administration (FHA) would let you file for a new one right away following a short sale. That's why—if you believe you won't be able to make your mortgage payments—you should start the short sale process as soon as possible.
Less of an Impact on Your Credit
One of the top four benefits of short selling your property is that it’ll have less impact on your credit score. While a foreclosure can remain on your credit history for up to ten years, a short sale typically lasts around two to three years. When you complete the short sale before missing mortgage payments, you also avoid having those missed payments show up on your credit score.
Obtain Relocation Assistance
When you qualify, you may be eligible to receive relocation assistance from either your lender or under government-sponsored programs such as the Home Affordable Foreclosure Alternatives Program (HAFA). Lenders or government programs that provide relocation help will generally offer you a list of conditions to fulfill. If you can meet these conditions, they’ll send you money to support you when you move.
Avoid a Deficiency Judgement
The gap between the total debt and the sale price is a deficiency, which is when the foreclosure sale price does not pay the balance of the borrower's mortgage obligation. The lender can obtain a deficiency judgment from the courts to make up for that leftover balance, so not only will your credit be negatively affected, but you can still be on the hook for the deficiency. With a short sale, you’ll typically be able to avoid paying the difference once you've completed the process.
As you can see, there are several significant differences between a short sale and foreclosure that make a short sale the far preferable choice. Short Sale Cooperative offers experts that have extensive knowledge of the short sale process. Whether you're an agent needing a short sale negotiator, or a homeowner looking for a short sale agent, we're here to help you. Feel free to contact us with any questions you may have.