If you are falling behind your mortgage payments and facing the fear of foreclosure sale, you can short sell your house. Short sale is the process in which the homeowner, who is falling behind on payments, sells the property in lesser amount than the amount due. The lender may forgive the remaining amount or he may ask the borrower to pay the difference between the sale amount and the mortgage amount.
When to do it
You can think about short sale when you do not have any loan modification options to choose. Also, if you have asked your lender for help regarding loan modification but he hasn’t responded positively, you should consider about short sale. Hire a short sale specialist and discuss the available options with him.
Alternatives of short sale
Before choosing the option of short sale, you should definitely take advice of a loan modification expert. Such an expert can guide you to get out of your current situation. Talk to your lender if he can accept your request for a revised payment plan so that you can avoid the short sale process.
Key points to keep in mind before beginning a short sale
- If you want to short sale your house while you are facing foreclosure, take the permission of your lender before beginning the process. Explain the reason why you have fallen behind on the payments and why you want a short sale.
- Hire any professional who can help you with the sale. Avoid any foreclosure company as they might say that they will help you avoid the foreclosure sale. But the truth is, they will charge too much for a little or no help.
- The price of the short sale should be as close to the mortgage amount as possible. Ask any real estate agent about the price you can ask for your house.
- In some places, if you don’t get the money equal to the mortgage payment, the lender can take legal considerations against you. Ask your lender if he can waive the remaining amount. But if he refuses, don’t get frustrated because you have to pay a very small amount after the sale.
The foreclosure process is lengthy and costlier than the short sale process for the lender. So you can short sale your house while you are facing foreclosure by taking the permission from the lender.