Chicago Real Estate Lawyers

3 benefits to a short sale

Selling a home can be a very difficult and exhausting process. It becomes even more stressful when you are facing financial hardship and fall behind on mortgage payments. Others may be able to make their payments but find that the amount they owe exceeds what their home is currently worth. In these situations, a short sale is one option you have to avoid further negative repercussions from your mortgage.

A short sale allows you to sell your home for less than its mortgage value. Here are 3 benefits to this:

1. Mortgage is considered to be paid in full.

If your lender agrees to a short sale, the proceeds of the sale go toward your remaining mortgage payments. The advantage of this is that, even if those proceeds do not fully cover the mortgage you still owed, your mortgage is considered paid.

This means you can move forward without worrying about owing money from your previous home. You may also save money on your payments by avoiding the full mortgage amount that would have been due.

2. You avoid foreclosure, which is time-consuming and damages credit.

It is true that a short sale could affect your credit quite a bit. However, the damage a foreclosure would do to your credit score is far worse. Future lenders may even view the short sale as a show of responsibility in that you managed your finances before you reached the need for a foreclosure. There are many other ways a foreclosure could negatively affect you, such as how long the process takes.

3. You may be able to buy a new home quickly.

After a foreclosure, you may not be able to purchase a new home for at least five years. A short sale allows you to buy a new home much more quickly. In certain circumstances, you might be eligible to buy immediately; otherwise, the wait could be up to approximately two years. This is significantly less time than a foreclosure, which means you can become stable again much sooner.

If considering a short sale

There are some significant advantages to seeking a short sale on your home, but you need to keep these important considerations in mind when proceeding. If your home’s value has fallen below your mortgage payment value or you are struggling to make payments and fear foreclosure, it is wise to seek the advice of a skilled real estate attorney. They can talk through your options and work for the best solution for your situation.