Edwardsville Illinois – If you have chosen to go for a short sale to avoid a foreclosure, it might not be as bad as you think. Negotiating with the lender to agree to a short sale might be the solution you are looking for.
Short selling means to sell a house to a buyer at a price lower than the market value of the house. The important thing to keep in mind is that the lender should first agree to accept the proceeds from the short sale as full mortgage payment even if the sale price is low.
Benefits of Short Sales
What might you gain from short selling your home? Here are the benefits that you might reap from a short sale:
- Eligible to purchase a new home
Fannie Mae has a two year loan program that allows you to purchase a new home as soon as you short sell your existing one. FHA also has a loan program that allows you to qualify for a new home loan within three years.
- Debt is wiped away
Most home owners sell their home due to financial conditions. Short selling their home might erase their loan debt in most situations. For instance, if your lender is Fannie Mae, FHA, Freddie Mac or VA, they have a policy that if short selling occurred because of difficult financial conditions, all your loan debt will be wiped away.
- Less damage to your credit rating
Most people believe that short sale will harm their credit rating. Well, the bad news is that it will damage your credit rating, and the good news is that foreclosure will have had a bad toll on your credit rating compared to short sale. A short sale may reduce your credit between 60 to 100 points.
- No short sale costs
A short sale will not cost you anything.All the costs related to short selling are paid for by the lender including insurance, attorney fees, fees or taxes on the sale, and real estate fees. Even
if the lender foreclosed the house, he will still have to pay the costs from his own pockets. So, a short sale might be a good option for you and your lender.
- No payments during short sale
When you put up your home for short sale, you are not required to pay the scheduled mortgage. This is a financial benefit as a short sale can take up to six or eight months. You can save the mortgage payments to pay rent on your new home.
The benefits of short sales can only be reaped if the lender agrees to a short sale. The lender might not forgive the remaining balance after the sales proceeds. He might file a ‘deficiency
judgement’ in court. Therefore, it is important to sign a document between you and the lender to waive any remaining balance. Then only could a short sale benefit you as a seller.
ValuQuest Invest specializes in real estate investments and solutions for difficult real estate situations. We buy homes, pay fast cash, sell your home fast, Edwardsville, Glen Carbon, Maryville, Granite City, Collinsville, Troy, Belleville, Shiloh, O’fallon Illinois, St. Louis Metro East