As you think about managing a foreclosure on your home or having a heavy mortgage to pay, it’s important to know all of your options, like using a short sale. In this article, we’ll dive into the question of a short sale and how it can benefit you as a Fort Worth, TX, homeowner.
What Is a Short Sale?
A short sale can be an efficient way to mitigate foreclosure (here’s a great definition of foreclosure) on a mortgage. Although short sales can be difficult to attain, they often prove to be an easier option for resolving any debt left over from a loan.
In the Fort Worth real estate market a couple of years back, short sales were really common. This was back when a flood of foreclosures hit the city. As foreclosures have slowed down and home values have increased, many lenders are less likely to offer short sales as an option (but they are still doing a lot of them!).
How Does a Short Sale Benefit You?
Avoid Foreclosure and Its Harmful Effects
The greatest benefit of a short sale is avoiding a foreclosure on your home. Your mortgage lender will accept less than what is owed on the mortgage, leaving you without the debt you struggled to afford.
Foreclosures can lead to all types of financials problems. One such problem is being unable to obtain a new loan for a home. A foreclosure will remain on your credit record to up to 7 years.
Another problem that comes from foreclosures is renting. With a foreclosure stamped on your credit record, you will have difficulty renting a home. It is often required that you disclose a foreclosure history on a rental application.
You may also have trouble obtaining a new mortgage. You won’t qualify with a foreclosure on your record.
No More Credit Worries
As you read above, a foreclosure can leave all sorts of problems on your credit history. Buying a new car or renting a house may become impossible through a normal bank loan.
Some companies even put a lot of stock into that kind of thing so it’s possible you could face termination. Fortunately, most employers don’t put a lot of emphasis on this.
A short sale will relieve the debt that is left over from the amount owed on the mortgage. This allows both the bank and the seller to move on. Short sales are also easier on your credit score, which can give a homeowner the ability to recover faster in the long run. With a short sale, your credit report will only show a pre-foreclosure status. This will reduce your credit rating minimally compared to a foreclosure.
Helps with Buying a New House
Purchasing another mortgage or home after a foreclosure can be tough. As we mentioned earlier, foreclosures stay on your record for up to 7 years.
However, a short sale offers a little more flexibility for the seller by allowing new home applications to be submitted only 2 years after filing, depending on the bank you see. Short sales also help when submitting a loan to a mortgage lender. They may be more likely to approve your loan than if you had undergone a full foreclosure.
Once again, all of this depends on the actual bank/lender you use, so if they give you a hard time a year or more after a short sale, look around for another bank to use.
Typically No Fees Involved
Another potential benefit of a short sale is that there are typically no fees from the bank on the process. Banks want to get it off their books, so if you can prove your house is “underwater” (you owe more on your house than it is worth) and you could potentially walk away from the house, banks would rather work something out through a short sale instead of continuing with a costly foreclosure process.
With a foreclosure, mortgage lenders must add extra fees that only make the damage worse. Additionally, some real-estate consultants charge a fee for facilitating the foreclosure with your bank, so check with your real estate consultant before enlisting them to help you with this.
Our company, W6 Property Solutions, may be able to point you in the right direction so you can receive the best shot at a bank approving a short sale with your Fort Worth house. Connect with us by calling (682) 233-5658 or send us an email through our contact page.
Getting the Short Sale: What You May Need To Provide
To get a short sale on your house, you’ll need to give your bank proof that you are unable to pay your mortgage payments, which can be difficult. This is best resolved by finding a good real-estate attorney in Fort Worth who has experience dealing with this area of law.
If you’re not sure who to contact to help with this, or where you can turn to see if a short sale is even an option for you, give us a call. We will not charge anything to simply discuss your situation and let you know your options. We can even offer you some guidance and pointers you’ll need for a short sale at no cost or obligation.
Sometimes we can even do the work for you and buy the house you’re looking to sell, to help get you out from under your mortgage. We buy Fort Worth houses and work with home sellers like yourself who need help getting out of a house the traditional way—or who can’t (or don’t want to) take the usual route of listing your house with an agent.
Contact us anytime to discuss your situation. We’re here for you!
Or if you already want to see what we can offer you 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. That way you know whether this is an option for you or not.