What is a short sale and how does it benefit you here in Coral Gables?
If you’re thinking that question about yourself… great question!
In this article we’ll dive into that question so you as a Coral Gables home owner can tell what your options are during foreclosure or just if your home mortgage is underwater.
If you’re a homeowner in Coral Gables struggling with mortgage payments, a short sale might be an option worth exploring. But what exactly is a short sale, and how can it benefit you? Here’s a breakdown to help you understand this alternative to foreclosure and how it can help you navigate tough financial waters.
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.
A short sale occurs when a homeowner sells their property for less than what is owed on the mortgage. In other words, the lender agrees to accept a reduced payoff in order to avoid the lengthy and costly foreclosure process. This can be a win-win for both the homeowner and the lender, as it helps the homeowner avoid foreclosure while the lender can recoup a portion of the loan balance.
While short sales can be more complicated and time-consuming than a traditional sale, they often provide a way out for homeowners who find themselves underwater on their mortgage.
Short sales were really common in the market a couple years back when the flood of foreclosures hit the Coral Gables 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 Coral Gables 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.
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. Foreclosures can also last a long time (up to 7 years as mentioned above), making you wait years to even qualify for a new mortgage.
By choosing a short sale, you can prevent foreclosure from being recorded on your credit history, which is a major benefit for your financial recovery.
Credit Worries
With a foreclosure, you face all kinds of ramifications with your credit. Buying a car and renting a house may be impossible through the normal bank loan routes. While a short sale will still impact your credit score, the damage is typically less severe than that caused by foreclosure.
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 (most employers won’t but it has been done before).
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
A foreclosure can last for a long time, making it impossible to purchase a mortgage again for up to 7 years. One of the biggest concerns homeowners have when facing financial distress is how it will impact their ability to buy a new home in the future. Since a short sale doesn’t carry the same long-term repercussions as foreclosure, you may be eligible for a new mortgage much sooner.
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” (you owe more than your house is worth)… and you’re at the risk of walking away from the house… the bank may rather work out a short sale instead of going through a costly foreclosure.
With a foreclosure, your mortgage lender may tack on extra fees that only make the damage worse.
Unlike traditional home sales that may require commission fees for real estate agents, a short sale usually involves no out-of-pocket costs for the homeowner. In many cases, the lender or the buyer will cover these expenses, making it an attractive option for those facing financial hardship.
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, Cash Home Buyer Florida 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 Coral Gables area house… so connect with us by calling (386) 383-2085 or shoot an email to us through our contact page here.
Getting a Short Sale – What You May Need To Provide
You will have to provide the bank with proof of being unable to pay your mortgage payments. This can be difficult and is best resolved by finding a good real estate attorney in your area that has experience dealing in this type of law.
If you don’t know who to contact or where to turn to see if a short sale may be a good option for you… get a hold of us.
We won’t charge a thing to discuss your situation with you and let you know your options.
And we can even give you guidance and pointers at absolutely no cost or obligation.
Sometimes we’re actually able to do the work for you or even buy the house from you to get you out from under that mortgage… so that may be a viable option for you.
We buy Coral Gables houses and we work with home sellers like yourself who are having troubles getting out of your house the traditional way… or who can’t (or don’t want to) go the usual route of listing with an agent.
Get a hold of us anytime to discuss your situation. We’re here for you!
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.
Get A Cash Offer On Your Coral Gables Area House Here >>