What is a short sale and how does it benefit you here in Lincoln?
If you’re thinking that question about yourself… great question! First of all, the fact that you’re asking that question probably means all is not well with your finances, but it also means that you’re proactively looking for a solution. So that’s a good sign! So what is a short sale and how does it benefit you?
In this article we’ll dive into that question so you as a Lincoln Nebraska home owner can tell what your options are during foreclosure or just if your home mortgage is underwater.
What is a Short Sale and How Does it Benefit You?
A short sale can be a smart way to mitigate foreclosure (here’s a great definition of what a foreclosure is in case you’re not sure) on a mortgage, although they can be difficult to attain in today’s market, they often prove to be a simpler way to resolve any debt left over from a loan. Basically, your mortgage lender accepts less than what you really owe. The lender recognizes that your home mortgage is underwater (mortgage is more than what the home is worth) and that your financial situation is difficult. So the lender agrees that accepting less is the best and quickest way to move forward.
Short sales were really common in the market a couple years back when the flood of foreclosures hit the Lincoln market… but as foreclosures have slowed down and home values have climbed back up a bit… lenders are a little less likely to offer a short sale as an option as they used to be (but they are still doing a lot of them!). Just because short sales are a little less common doesn’t mean you shouldn’t try to convince your lender!
Here are a few reasons you may want to consider short sale on your Lincoln home
You Avoid Foreclosure And The Harmful Effects Of It
The best benefit of short sale is that you avoid a foreclosure on your home. Your mortgage lender accepts less than what is owed on your mortgage, leaving you without the debt that you cannot afford.
Please do everything possible to avoid foreclosure! It is a horrible route to go down. Foreclosure can lead to all kinds of financial problems, starting with the inability to obtain a new loan for a home because a foreclosure stays on your credit record usually for up to 7 years.
Even renting will become more difficult as your credit score would be affected, and you often have to disclose a foreclosure on a rental application. Foreclosures can also last a long time (up to 7 years as mentioned above), making you wait years to even qualify for a new mortgage. 7 years is a very long wait.
Credit Worries
With a foreclosure, you face all kinds of ramifications with your credit. Buying a car and renting a house may be impossible through the normal bank loan routes. This will push you into more risky and expensive loans, and will force you to rent in undesirable and very inconvenient locations.
If you work with money at your job you could even face termination if your employer puts a lot of stock in that kind of thing (most employers won’t but it has been done before).
A short sale relieves the debt that is left over from what is owed on the mortgage, letting both the bank and the seller move on. There will be effects on your credit, however. A short sale is also easier on your credit score, which can allow a homeowner the ability to recover in the long run. Your credit report will only show a pre-foreclosure status, which reduces your credit rating minimally compared to a foreclosure. It might not sound that much better, but it really is (anything is better than foreclosure really).
Buying a New House
If you’re still asking yourself what is a short sale and how does it benefit you, consider how a foreclosure can really make your life more difficult. A foreclosure can last for a long time, making it impossible to purchase a mortgage again for up to 7 years.
Short sales offer a little more flexibility for the seller, allowing new home applications only 2 years after the filing depending on the bank. It also makes a mortgage lender more likely to approve your loan than if you had a full foreclosure, getting you back into a home faster. It also shows the mortgage lender that you proactively looked for solutions and avoided full foreclosure.
Again, this all depends on the actual bank / lender you’re working with… so if they’re giving you a hard time a year or two after a short sale… shop around and find another bank to work with.
Usually No Fees Involved
One potential benefit of the short sale is there are usually no fees associated with the process from the bank. The banks just want to get the note off of their books… and if it can be proven that your house is “underwater” (you owe more than your house is worth)… 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.
With a foreclosure, your mortgage lender may tack on extra fees that only make the damage worse. These fees can really add up, plus there’s the additional mental and emotional damage it will create.
Some real estate consultants may charge a fee for helping facilitate the foreclosure with your bank… so check with them before you enlist a real estate agent or firm in helping you with this.
There is a better way. Our company, Sell Lincoln Mobile Homes may be able to guide you in the right direction on how to give yourself the best shot at a bank approving a short sale with your Lincoln area house… so connect with us by calling (657) 206-8013 or shoot an email to us through our contact page here. We want to help you get out of your difficult situation and get on with your life.
Getting a Short Sale – What You May Need To Provide
You will have to provide the bank with proof of being unable to pay your mortgage payments. This can be difficult and is best resolved by finding a good real estate attorney in your area that has experience dealing in this type of law. Oftentimes a good attorney is really the key when you are in difficult financial situations.
If you don’t know who to contact or where to turn to see if a short sale may be a good option for you… get a hold of us.
We won’t charge a thing to discuss your situation with you and let you know your options.
And we can even give you guidance and pointers at absolutely no cost or obligation.
Better yet, sometimes we’re actually able to do the work for you or even buy the house from you to get you out from under that mortgage… so that may be a viable option for you. We may be able to take over the existing mortgage for you. You can be free from the headache.
We buy Lincoln houses and we work with home sellers like yourself who are having troubles getting out of your house the traditional way… or who can’t (or don’t want to) go the usual route of listing with an agent. You can even sell us your house as is without doing any repairs. Many home sellers who want to need to sell their mobile home fast have contacted us and walked away with cash in their pocket.
Get a hold of us anytime to discuss your situation. We’re here for you!
Or, if you want to see what we can offer on your house… click the link below and fill out the form on the next page. We’ll make a no-obligation cash offer to you within 24 hours. We can also close fast, usually within a week. At least that way you know whether that is an option for you or not.