Short Sale of a Home After a Job Loss
A short sale – an opportunity to sell your home for less than what it is worth – seems like an excellent solution for the unemployed mortgage borrower who needs to get out from under a loan. You lost your job. You have no way to pay your mortgage payment reliably over the next few months even if you get into the ideal position right now. Why not just let someone buy it?
The problem is that short sales are a legal transaction that your lender has to agree to, which makes them quite difficult to process. A short sale means means someone is going to lose money.
A short sale results from selling a house for less
than what is owed on the mortgage loan.
Talk to a licensed HomeGo agent today.
How Common Are Short Sales?
According to the National Association of Realtors, as reported by U.S. News and World Report, just 1 percent of the total number of existing home sales occurring each year are in fact short sales. If you are planning to use this method, you’ll need to consider it carefully.
The key benefit for the existing homeowner is to use a short sale to get out from owning the home. This can work – if the lender agrees to it.
If you have a loan you can no longer afford to pay, finding someone to buy your home for less than what it is worth could help you to stop battling those monthly payments. In this manner, short sales offer benefits.
The property owner sells the home, removing liability from the property.
You are able to sell the home through a legal contract, which may mean you don’t have to worry about it damaging your credit score.
Short sales may help homeowners in tough markets to find willing buyers.
Lenders & Home Short Sales
From the standpoint of the home loan lender, short sales represent a financial loss. It means the lender has to take a loss from the projected investment it made into your home’s purchase. Most lenders do not want to do that, which is why they tend to drag out short sales for months and months.
On the other hand, if you present yourself as what you are – an unemployed mortgage borrower without the means to continue to make payments, the lender is going to see this as a must in their situation. Lenders don’t want to go through foreclosure if they can avoid it. It’s costly and time-consuming. When the lender believes there’s no hope, short sales look better.
Home Affordable Foreclosure Alternative Program
The Home Affordable Foreclosure Alternative Program offers an alternative for foreclosure. This program, managed by Fannie Mae, one of the biggest mortgage lenders in the United States, offers an opportunity for homeowners to get help when they need it the most. In short, it offers the borrower as well as the lender to see some benefits if they choose a short sale instead of foreclosure.
Under this program, the lender agrees to accept payment in full if the borrower finds a buyer for the home even if that buyer is not willing to pay what is owed on the debt. The benefit under this program is that borrowers no longer have to worry about lenders filing a lawsuit for any loss the lender incurred from the short sale. If you plan to do a short sale, this program can be an important tool in doing so.
HomeGo Can Help.
For many people, selling an inherited property ASAP is the simplest, most straightforward solution.
HomeGo is the nation’s largest home buying company, and we’re bringing professional experience, transparency, and assurance to homeowners who want an easier way to sell.
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