Facing foreclosure is never an easy process, and if you’ve decided to stop the foreclosure, you must be aware of your options. The federal law mandate that your lender should make available loss mitigation options before proceeding to foreclosure. One of the most used forms of loss mitigation is a short sale. A short sale is when you sell your home to a buyer for a value lesser than the amount you owe on your mortgage. There are so many benefits attached to using this method to stop foreclosure, here are a few:
In a foreclosure sale, the best bidder wins, and your home will be sold to whosoever it is that won. Suppose you have some things in the house you want to preserve; you might not be chanced to communicate effectively with the individual. However, you can make your requirements know during a short sale, and you can get want you want.
After a foreclosure sale has been finalized, you will receive an eviction notice to make the house available for the new owner. However, with a short sale, you can negotiate when you want to move out and at a convenient pace. This advantage is not present with foreclosure.
Foreclosure can reduce your credit score by over 200 points, making it difficult to secure another mortgage. A short sale will not just keep your credit score healthy; it will make it easier to secure another loan.
The only disadvantage of a short sale is that most homeowners get sued for the rest of the payments. You can avoid this by having your lawyer note that no deficiency judgment will be allowed in the agreement papers. Also, make sure to inform your lender before accepting any payment on the property to avoid unnecessary liabilities.