What is a short sale and how does it benefit you here in Fort Worth?
You can sometimes avoid mortgage delinquency by the strategic use of a “short sale”. Despite the fact that in today’s market a short sale can be tough to obtain, it frequently proves to be a less complicated approach to settle any debt that is still outstanding from a loan.
Short sales became prevalent when a wave of foreclosure hit the Fort Worth market a couple of years back. However, as foreclosures have decreased and housing values have risen a little… Lenders are less likely to provide a short sale as an alternative than they were previously.
If your Fort Worth, Texas house is in danger of being foreclosed upon or if your mortgage is underwater, we’ll explain your alternatives in this article.
Here are a few reasons why a short sale on your Fort Worth home can be good.
You Stay Away From Foreclosure And Its Negative Consequences
The most significant advantage of a short sale is that it allows you to prevent the foreclosure of your house. Your mortgage lender agrees to take less than what is owed on your mortgage. This means that you will no longer be responsible for the debt that you are unable to pay.
A foreclosure can result in a wide variety of monetary issues. The first of which is the inability to acquire a new loan for the purchase of a home. This is because a foreclosure can stay on your credit report for up to seven years.
Even renting will be more difficult for you as a result of the impact on your credit score. You will also likely have to disclose a foreclosure on a rental application. Foreclosures can also take a long time to complete (up to seven years, as indicated above), making it difficult to even qualify for a new mortgage.
If you go through with the foreclosure on your home, several negative effects will be on your credit score. Through the typical channels of a bank loan, purchasing a car and renting a house may be completely out of the question.
When a home is sold for less than what is owed on the mortgage, the difference is forgiven through a short sale. This paves the way for the seller and the bank to move on with their lives. It can give a homeowner the opportunity to recover financially in the long run. This is because a short sale has a less severe impact on a person’s credit score. You will just have a pre-foreclosure status listed on your credit record. Doing so will only slightly lower your credit rating in comparison to what it would be after a foreclosure.
Buying a New House
The seller has a little bit more leeway with a short sale and depending on the bank. The seller may be able to apply for a new mortgage only two years after completing the sale. It also increases the likelihood that a mortgage lender will approve your loan, allowing you to move back into a home more quickly than if you had gone through a full foreclosure.
Again, all of this is dependent on the specific bank or lender that you are collaborating with… Therefore, if they are still difficult to work with a year or two after a short sale, you should look into other financial institutions to collaborate with.
There are Usually No Fees Involved
As a general rule, the bank will not charge any fees in connection with the short sale process. This presents a possible advantage to the seller. The goal of the bank is to simply remove the note from their records… And if you can prove that your home is “underwater,” 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.
In the event of a foreclosure, your mortgage lender may tack on additional costs that will further add to the problem.
For their assistance in facilitating the foreclosure process with your bank, many real estate consultants may charge a fee… Therefore, it is important to check with them before enlisting the assistance of a real estate agent or firm in this endeavour.
What You May Need To Provide During A Short Sale
You will need to supply the bank with evidence that you are unable to keep up with the payments on your mortgage. Finding a reputable real estate attorney in your region who has expertise working with cases involving this kind of law is the best way to find a solution to this problem, which can be challenging.
A short sale is typically the result of a financially troubled homeowner needing to sell their home before the lender forecloses on it. The lender receives all of the money from a short sale. The lender then has two options: forgive the remaining sum or seek a deficiency judgment, requiring the former homeowner to pay the difference in full or in part.
If you are behind your mortgage and in danger of foreclosure, a short sale might be your best option. Contact us if you’re unsure if a short sale is right for you. Call TMC Property Solutions at (817) 550-5069 Opt# 4 and we shall assist you. To fast-track, the process, simply fill out our short form to give us more information about you and we’ll be in touch with you and help you find the best solution!
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