Is a Short Sale Better than Foreclosure?

Losing your home to foreclosure due to an inability to keep up pictRSI_8877with your monthly mortgage payments is one of life’s most unpleasant experiences. It is also an event that keeps on affecting you long after your home is history by devastating your credit score. Regrettably, most people cannot be 100% sure that they will remain safe from foreclosure because they can’t foresee the unexpected. Occurrences such as serious illness, a major accident, divorce or job loss can happen to anyone. So it’s a good idea to understand the available alternatives should the worst occur.

 

The inevitable result of a foreclosure is the lender taking your house. Not only will you lose your house, but the lender can get a judgment against you for the arrearages you owe plus his costs for the foreclosure action. If that isn’t enough, your credit report will be in terminal condition for many years to come, worsening an already bad financial situation and making it very difficult to obtain any other kind of credit. There is no upside to foreclosure. It should be avoided at all costs.

A short sale is a popular option for homeowners mired down with financial problems. In this case, you would sell your home for less than what you owe your lender; the biggest problem you will face is getting your lender to agree to a short sale. In many situations, they will not. Experts advise pursuing this option the minute you realize that you are falling behind in your payments and most likely won’t be able to catch up. The longer you wait and the greater the amount you are in arrears, the less likely it becomes that your lender will even be willing to discuss a short sale.

While a short sale will save you from foreclosure, it will also have a negative effect on your credit score, frequently lowering it by as much as 200 points. This can be overcome more quickly than the black mark of a foreclosure, especially if you manage to retain one or two credit cards and keep them current.

If  you have the right team in place including your real estate attorney and a Certified Distressed Property Expert certified REALTOR®, reduces your chances of foreclosure. To really get a good idea of what a CDPE can do for you click on the following link  What Is a Certified Distressed Property Expert (CDPE)?  To find out all the benefits and options of purchasing a forecloure, contact Eddie Perez, Broker-REALTOR®, CDPE or Anoir Redouane, REALTOR®, CDPE.  Their market includes Hoboken, Jersey City, Weehawken and Union City.  They can be reached at 201-344-2886 or at eddie@InvestHoboken.com or Prevent Foreclosure.

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