Foreclosure or Short Sale?

Author: Mark Zawaideh

Author: Mark Zawaideh

Neither are a very good situation to be facing but with a national mortgage crisis threatening millions of Americans due to the current state of the economy, more and more people are now opting for a short sale on their home as oppose to going down the road of a foreclosure. Regardless of what state you live in, you may be thinking about your options if you are one of the many people who are struggling with repayments on your property. For many people a short sale is now looking like the best but last option that they have. A short sale allows you to get out of your mortgage liability without facing the prospect of bankruptcy. So what exactly is a short sale. With a short sale your lender will accept a discount on a mortgage as a way of avoiding heading into a possible foreclosure. A short sale is when you sell your property for less than it is worth and for less than what you owe your lender. You can only approach a short sale however if your lender agrees to it; this is often the biggest problem that is associated with a short sale. The process that is involved in a short sale is a unique arrangement where the financial institution (your lender) and you, the home owner work together to sell the property before it becomes another foreclosed property. Ok so we have covered what a short sale is and why it can help you but what is a foreclosure and why should we be avoiding it at all costs? Well the term foreclosure refers to the legal process in which a lender, generally the mortgage lender, will obtain a court order that states the termination of a mortgagors equitable right of redemption. In the process of a foreclosure you will lose your home; it will be repossessed by the lender if you fail to keep up with your mortgage repayments. If you did face a foreclosure you would not only lose the property but also all of your rights associated with the property would be terminated and you would be evicted. Your property would then be sold on and you wouldnt be able to do anything about it. Sadly many people are facing foreclosure due to the increase in a loss of jobs. Other factors that could prevent you from keeping up with your mortgage repayments are divorce, illness and a major accident. It is because of this and the fact that anyone could end up facing the prospect of foreclosure that you understand what alternative options are open to you, such as a short sale. Either way, whether you are going through a short sale or foreclosure, you will lose your home so what difference does it make? The main difference comes in what it will do to your credit score. With a foreclosure your credit score and history will be left in a state. You will find it extremely hard to get any form of financial help in the future as a result of it. With a short sale however, your credit score and history will be affected but you will be able to recover from it pretty easily. There is no upside from a foreclosure but there is with a short sale. So if you think you are going to face a foreclosure you should get in touch with a realtor who will be able to help you approach a short sale instead.About the Author:

Let the Mark Z Home Selling Team help you find your next dream home Are you looking for Bank Owned Homes in Michigan? How about Commerce MI Real Estate or homes in Oakland County. For more information you can contact us at 248.937.1337.

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