What is a short sale and how does it benefit you here in Front Royal?
If you’re thinking that question about yourself… great question!
In this article we’ll dive into that question so you as a Front Royal VA home owner can tell what your options are during foreclosure or just if your home mortgage is underwater.
What is a Short Sale and How Does it Benefit You?
A short sale can be a smart way to mitigate foreclosure (here’s a great definition of what a foreclosure is in case you’re not sure) 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 the Front Royal market… 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 (but they are still doing a lot of them!).
Here are a few reasons you may want to consider short sale on your Front Royal home
You Avoid Foreclosure And The Harmful Effects Of It
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.
As your credit score is impacted, the task of renting may pose increased challenges, compounded by the necessity of disclosing a foreclosure on rental applications. Additionally, the enduring effects of foreclosures, which can span up to 7 years, further prolong the duration before you become eligible for a new mortgage, potentially extending the waiting period significantly.
Credit Worries
When grappling with a foreclosure, you confront an array of repercussions that extend to your credit standing. Securing a car loan or finding rental accommodation via conventional banking channels may prove insurmountable challenges.
Furthermore, individuals employed in financial sectors may risk termination if their employer places significant emphasis on creditworthiness (though this is not a widespread practice, it has been observed on occasion).
Opting for a short sale alleviates the residual debt stemming from the outstanding mortgage, enabling both the lender and the seller to move forward. Notably, a short sale presents a less severe impact on your credit score, offering homeowners a pathway to long-term recovery. Your credit report will merely reflect a pre-foreclosure status, resulting in minimal credit rating reduction compared to a full-fledged foreclosure.
Buying a New House
Foreclosure proceedings can drag on for an extended period, potentially rendering it impossible to secure a mortgage for up to a span of 7 years.
In contrast, short sales offer sellers a degree of flexibility, potentially allowing them to apply for a new home loan within as little as 2 years following the initiation of the short sale process, contingent upon the policies of the specific bank involved. Moreover, opting for a short sale makes it more probable for a mortgage lender to approve your loan application compared to a scenario where a full foreclosure has occurred, facilitating a quicker return to homeownership.
However, it’s important to note that the feasibility of obtaining a mortgage post-short sale is contingent upon the policies and practices of the individual bank or lender. Therefore, if you encounter difficulties securing a mortgage from a particular bank in the aftermath of a short sale, it’s advisable to explore alternative options and seek out another financial institution willing to work with you.
Usually No Fees Involved
A notable advantage of opting for a short sale is typically the absence of fees imposed by the bank throughout the process. Financial institutions primarily aim to remove the outstanding debt from their balance sheets. If it can be demonstrated that your property is in a situation where its market value is less than the outstanding mortgage balance, putting you at the brink of abandoning the property, the bank may opt to pursue a short sale instead of initiating a costly foreclosure proceeding.
In contrast, with a foreclosure, your mortgage lender might add on supplementary fees, exacerbating the financial strain you’re already facing.
Some real estate consultants may charge a fee for helping facilitate the foreclosure with your bank… so check with them before you enlist a real estate agent or firm in helping you with this.
Our company, Five15 Properties may be able to guide you in the right direction on how to give yourself the best shot at a bank approving a short sale with your Front Royal area house… so connect with us by calling (540) 212-4047 or shoot an email to us through our contact page here.
Getting a Short Sale – What You May Need To Provide
If you find yourself in the challenging position of needing to provide the bank with evidence of your inability to meet mortgage payments, this can prove to be a complex task, best navigated with the assistance of a knowledgeable real estate attorney in your locality experienced in handling such matters.
If you’re uncertain about whom to reach out to or where to seek guidance to determine if a short sale might offer a viable solution for your circumstances, do not hesitate to contact us.
We are committed to providing you with a complimentary consultation to thoroughly explore your situation and inform you of the available options, without any charges or obligations.
Furthermore, we are available to offer valuable advice and assistance at no cost whatsoever. In certain cases, we may even be able to undertake the necessary steps on your behalf or purchase your property directly from you, offering you relief from your mortgage burden.
As specialists in purchasing houses in Front Royal, we collaborate with homeowners facing challenges in selling their properties through conventional means or those who prefer an alternative to listing with an agent.
Feel free to reach out to us at your convenience to discuss your circumstances. We are dedicated to supporting you through this process!
Or, if you want to see what we can offer on your house… click the link below and fill out the form on the next page. We’ll make a no-obligation cash offer to you within 24 hours. At least that way you know whether that is an option for you or not.