Home Owners Facing Foreclosure: Difficulties in Paying your Mortgage? Here’s A Way Out
Today’s homeowners are finding it more difficult to pay their mortgages on time or in full only to then face a lender’s foreclosure. The problem is most home owners in financial distress aren’t sure what to do, and walk away from their mortgage believing this was their only option. Well, think again, there are options and solutions to avoid this!
The most sensible option of defense to being foreclosed on is a Short Sale. Yet, its also the most unfamiliar choice as most residents in the Treasure Coast of Florida aren’t aware a short sale is even possible. Government loan modification programs could also help, but its unlikely as most fall short.
A Short Sale is when your lender agrees to receive less money than entitled to pay-off the remaining amount of your loan. Hence, being “short” of what was originally owed. Why would the lender do that? Well, they aren’t in the business of owning homes, and generally do a poor job of it. Also, foreclosures are expensive for lenders, and in the end they most likely won’t get all they’re owed anyway.
We have the real estate experience and the market know-how for the Treasure Coast neighborhoods stretching from North Palm Beach to Stuart to Vero Beach, Florida. You can be assured and gain the confidence of knowing we’re always here for you to provide only the best real estate options to choose from.
Why not be foreclosed on? Why sell your home short?
Here’s the Advantages of doing a Short Sale:
Avoids the Foreclosure Stigma
Short sales allow you to avoid that dreaded foreclosure status and get on with your life without worrying about how a foreclosed home will impact your credit report. If foreclosed on, home owners will always have to disclose they had a foreclosure on future mortgage applications and (many job applications). This can have an adverse affect on their future mortgage rates and foreclosures are also asked in credit inquiries with no seven-year time limit.
Protect Your Credit Score
Foreclosures can lower credit scores by 300-plus points (per loan). The impact of a short sale is about half that much. Your credit rating will take a hit regardless of whether you choose to short sale, foreclosure, or go bankrupt. Yet, a short sale might allow you to buy a big-ticket item on credit a year or two earlier than you otherwise would.
Improve Eligibility for a Government Insured Loan
The homeowner will be ineligible for a government insured loan for 5-7 years (only two years in a short sale). A foreclosure is the one credit report item that is almost impossible to have repaired.
Avoid a Deficiency Judgement
Short selling gets the home owner out from under their mortgage without being liable for the loan amount left unpaid. But if foreclosed on, lenders can seek what is called a deficiency judgment against that home owner and collect any amount they don’t recover from the future auction sale on that foreclosed home.
Protect Employment Prospects
Many employers run credit checks on prospective employees. Foreclosure is one of the top items that will put a potential new hire, or even current employment, in jeopardy.
More Advice and One Tip
A short sale is a lengthy and confusing process that is best left to the professionals. Short sale timelines, while still longer than normal, are shrinking as lenders get their paperwork act together. Our agents know where to find buyers, and how to negotiate the buyer’s offer effectively with lenders and get the deal closed—so the homeowner can move on with life and recover.
Here’s the Negatives of a Short Sale:
No Money Earned or Received
When it comes to selling a short sale, you are not actually going to see any of the money. The closer the price offer is to the market value of your home, the more likely your short sale will be accepted by the lending company, but, personally, this price does not affect you at all.
Its difficult to accomplish a short sale if you don’t get started as soon as you learn about the pending foreclosure. Don’t wait until you have received the final notice of foreclosure, as it may be too late to help. For the best results when considering to sell your home as a short sale, act fast. If you’re in need of some assistance, contact our short sale agents as soon as you start having trouble.
Negotiating the Short Sale Terms
You have to a real buyer’s offer before you can find out whether or not the lender will go along with it. A short sale will benefit you only if the lenders are willing to accept the amount a buyer is willing to pay and let you off the hook for the rest. For example, if you owe $300,000 and you can sell your house for just $200,000, you are unlikely to be successful in negotiating a short sale. The closer the offer is to the principal balance of the loan, the quicker the lender will sign off on the sale.
Our real estate agents know the kind of deals lenders are accepting in Palm Beach County and the Treasure Coast of Florida markets. Our real estate agent’s negotiating help can be critical, because the lender may agree with the proposed offer, or it may make a counteroffer. This may go back and forth until everyone is satisfied or the deal falls through. These are the top reasons, but there are more. Contact one of our short sale specialists to give you a full picture of the options.
We provide a Personalized Family Approach to Real Estate like no other. AmPro Realty is recognized as one of America’s top growing real estate companies. We are an independently owned, full-service real estate brokerage firm covering communities throughout the beautiful Palm Beach County and Treasure Coast of Florida. By offering great style, quality and unprecedented value, it's easy to see that at AmPro Realty, it's all about you!