When you are buying a new house, you don’t expect that you will meet the point when you may begin to lose that home. However, for many of those who come into this situation they have real problems to face. The market for real estate isn’t very high and in reality most people have a negative equity. They are confronted with possibly losing their house. It can be a scary situation and one that these people cannot ignore. So why is a short sale better than a foreclosure? Continue reading for the best answer.
Why is a Short Sale Better than a Foreclosure? This is because it is a better option.
When it comes to answering the question: Why is a Short Sale Better than a Foreclosure the main it can be tough. However, those individuals who are confronted with a foreclosure do have other options available to benefit them more than a foreclosure would. The best option would be to short sell their home instead of going through with the foreclosure. Obviously, this would still require you to lose your house but you could sell your house for a lower amount that you owe on your mortgage loan. This would mean that the home is sold at a huge discount but it would still go through a real estate agent just like any other house would during a sale.
Benefits of a Short Sale
When it comes to comparing a short sale to a foreclosure, there are many benefits that a short sale offers. The first benefit is that a short sale would impact your credit score much less than a foreclosure would. Even though you will still have a negative mark on your credit score, it will be a lot less than if you were to have a foreclosure on your credit score. In more explanations, this would mean that you may be able to get another mortgage through programs such as Fannie Mae possible within a two to three year period after the short sale. Generally, with a foreclosure, you would have to wait seven years after the foreclosure before you could get another mortgage.
Another benefit of a short sale is that you won’t be boarded out of your own house. During a foreclosure, you get evicted and can’t go onto your property once the lender forecloses on you. During a foreclosure, your home will then be put up for sale at a very low rate and the buyers generally don’t respect the property. However, with a short sale your house is shown through a real estate company, by an agent, and you can stay in your home until the short sale is finalized. Most of the time though the bank sets a time limit on how long you can stay there but at least you won’t be forced out very quickly.
By learning about the short sale process there may be many complications that arise. Not all lenders will accept the short sale process for you. However, generally if you are looking at a foreclosure, you should try to get a short sale as that will be the better option for you. You can look over your options to make sure that there won’t be worse effects on you, than a foreclosure would though. Overall, if you have to lose your home, losing everything at one time isn’t the way to go which is why you should try for a short sale.