How Does Short Sale Can Benefit You in North Central Illinois?
A short sale can be a smart way to mitigate foreclosure on a mortgage, although they can be difficult to attain in today’s market, they often prove to be a simpler way to resolve any debt left over from a loan.
Short sales were really common in the market a couple years back when the flood of foreclosures hit in certain markets. But as foreclosures have slowed down and home values have climbed back up a bit, lenders are a little less likely to offer a short sale as an option as they used to be.
Reasons You want to consider short sale on your North Central Illinois house
You Avoid Foreclosure
The best benefit of short sale is that you avoid a foreclosure on your home. Your mortgage lender accepts less than what is owed on your mortgage, leaving you without the debt that you cannot afford.
Foreclosure can lead to all kinds of financial problems, starting with the inability to obtain a new loan for a home because a foreclosure stays on your credit record usually for up to 7 years. Since foreclosures last a long time making you wait years to even qualify for a new mortgage. Even renting will become more difficult as your credit score would be affected, and you often have to disclose a foreclosure on a rental application.
Credit Worries
With a foreclosure, you face all kinds of consequences with your credit. Buying a car and renting a house may be impossible through the normal bank loan routes.
If you work with money at your job you could even face termination if your employer puts a lot of stock in that kind of thing.
A short sale relieves the debt that is left over from what is owed on the mortgage, letting both the bank and the seller move on. A short sale is also easier on your credit score, which can allow a homeowner the ability to recover in the long run. Your credit report will only show a pre-foreclosure status, which reduces your credit rating minimally compared to a foreclosure.
Buying a New House
Short sales offer a little more flexibility for the seller, allowing new home applications only 2 years after the filing depending on the bank. It also makes a mortgage lender more likely to approve your loan than if you had a full foreclosure, getting you back into a home faster.Again, this all depends on the actual bank / lender you’re working with. So if they’re giving you a hard time a year or two after a short sale, shop around and find another bank to work with.
Usually No Fees Involved
One potential benefit of the short sale is there are usually no fees associated with the process from the bank. The banks just want to get the note off of their books… and if it can be proven that your house is “underwater”.
