Short Sales vs. Foreclosure

Losing your home to foreclosure is one of life’s most unpleasant experiences, it is also an event that keeps effecting the homeowner long after it is over, often-times devastating credit scores. Serious illnesses, accidents, divorce and job loss are all top reason's families go through foreclosure. So let's

und erstand the difference in short sale vs. foreclosure as an option for families and which may be the better road to travel.

Foreclosure:
Not only will the homeowner lose their home, but the mortgage lender can get a judgment against you for the monies you owe on the loan PLUS the costs for the foreclosure!  The homeowner's credit will be shot effecting future purchases, gaining credit and possibly future employment.  Foreclosure should be avoided at all costs.

The Short Sale:
If foreclosure seems inevitable, a short sale is a popular option.  In this case, the homeowner would sell their home for less than he balance of the loan.  The biggest problem homeowners face with this, is getting the mortgage lender to agree. Homeowners should try this method as soon as they realize they are falling behind on payments - The longer homeowners wait, and the greater the amount they owe, the less likely a short sale becomes viable.

Disadvantages of Short Sales:
Short sales save the homeowner from foreclosure, but will still effect credit scores, frequently lowering them by as much as 200 points. Secondly, while some lenders will forgive the deficiency amount in full, others will expect full or partial payment of the shortage amount. Just be aware, that your lender may approve the sale to the new purchaser, the seller may still be liable for the difference of the existing mortgage balance and the new sales price. Seek competent advice regarding this area.

In any case, a homeowner should do everything to avoid foreclosure.  As a Certified Distressed Property Expert, The Wickland Group can assist you in the best way to avoid foreclosure for YOUR family.  Contact us today for your complimentary home evaluation and advice on avoiding foreclosure for your family!