A short sale is when the mortgage lender agrees to settle with a discounted payment that is less than the balance due on the loan in order to consume a sale of the property and stop foreclosure. By going this route, you will help the lender receive more of the loan balance and lower fees compared to a foreclosure proceeding. The owner will also maintain a better level of credit. Certain criteria must be met to qualify for a short sale. The homeowner must provide the mortgage lender with the hardship provision and evidence of zero equity in the property. It is an extremely complex transaction, so make sure you select an experienced professional who is highly knowledgeable in this field.

6 differences between a short sale and a foreclosure

1. Credit score

A short sale reduces your credit by as little as 50 points over 12 to 18 months. While foreclosure reduces it to a minimum of 250 points for three years or more. Without the ability to repair your credit after foreclosure, it can affect your ability to gainfully employ or find housing.

2. Credit history

A short sale is reported paid in full and does not show up on a credit report. A foreclosure will be on your credit history for 10 years or more as public records.

3. Waiting period to buy another home

If you can stop your foreclosure, you can get loans with reasonable interest rates within two years. With a foreclosure, you can wait anywhere from 24 to 72 months.

4. Cost and duration of time

Short sales are typically faster and less expensive than foreclosure and save you from a lot of embarrassment and embarrassment associated with foreclosure. Foreclosure puts you at risk of being sued by your lender, prolonging this painful experience even longer. Foreclosure also causes your neighbors’ houses to drop in value.

5. Future loans

With most lenders, you don’t need to declare a short sale on a standard loan application, while a foreclosure will therefore skyrocket your interest rates. Know that you may experience this reminder every time you need a loan for the rest of your life.

6. Sale of property

A short sale is a consent agreement between the seller and the lender, while a foreclosure is a forced action on the seller by the lender.

Many unlucky homeowners find themselves caught in a dilemma due to a poor local and national real estate market or financial difficulties. Homeowners cannot refinance or modify their mortgage loan. Restore your dignity and peace of mind. Enjoy not only forgiveness, but some banks offer cash or other compensation to owners who cooperate in this short sale process. Real estate firms that specialize in these types of transactions have the experience and solutions necessary to eliminate your mortgage debt problems and give you the free lifestyle you crave. Time is of the essence, so call an agency right away to get your questions answered. Make the best decision of your life and stop your foreclosure proceedings.