I. Please understand that you have nothing to be ashamed about if you are facing a foreclosure. The economic downturn and market drop caught all of us by surprise. Exploring the decision to consider a short sale or foreclosure is the first step to getting your finances back on track.
Many people are at the point where they can no longer make their mortgage payments because due to circumstances; it has now risen to the point of being unaffordable. They may have lost a job, maybe the loan has adjusted to a higher interest rate…And to add insult to injury, the equity in the home has diminished because of a 50% drop value due to the housing market. These are just some of the reasons people are considering walking away from their homes. But what about the consequences of a foreclosure and the impact of this decision for years to come?
II. Consider some other alternatives. There are several governments programs created to help the homeowner faced with these decisions. They can contact their mortgage holder and try to do a work-out with them. This possibility exists but helps very few homeowners. Statistics have shown that in most cases, loan modifications seldom reduce the principle balance and offer short temporary relief.
III. If you decide to let your home go into foreclosure, you may want to try the Short Sale process first. 72% of all valley sales are due to Short Sales and Foreclosures. What does that mean? It means the lenders are working with many homeowners by cooperating in a short sale on their property. A short sale is where the lender is willing to allow a sale and accept less than what is owed to them. Why would they do this? In the long run, financially this is a sound decision because a short sale costs the lender less money than a foreclosure. So if you qualify for a short sale, this may be the step you take before you let your house go into foreclosure. The good news is the lender pays all the costs. NO COST TO YOU!
IV. With a short sale, you place your house on the market with an experienced real estate professional that specializes in short sales you will be required to provide the lenders with your financial situation and hardship. Your real estate professional will provide the lender with all the market condition documentation to support your properties value as well as communicate on a regular basis to affect the final short sale. The advantage to you is your credit is impacted less which allows you to buy your next home much sooner. Secondly, depending on your circumstances, the government allows debt cancellation tax advantages for a period of time, and you are relieved of this property. You move on with your life and can start over again. There are many desirable single family rental properties that you can rent in your neighborhood or school district to make the transition as easy as possible.
V. Should your property go into foreclosure, your credit will be negatively impacted more than a short sale and it takes much longer to establish a good credit rating and longer to be able to purchase a home again. We specialize in Short Sales and can be your resource. Please feel free to call with any questions or concerns. My goal is to provide you with the information to make decisions that are right for you and your family. Click here to read about the impact on your credit score.
Please note that this is very general information and may not apply to your circumstances. I strongly recommend that you seek the counsel of an attorney and CPA. I will provide you a list of 3 attorneys and CPA's to choose from.
