Short Sale In Richardson: How to navigate your property to avoid foreclosureConsidering short sale in Richardson to avoid foreclosure? Read on to find out the benefits.
With the threat of foreclosure looming over hundreds of thousands of homeowners throughout the United States, the time to consider a short sale in Richardson has never been better. While the foreclosure market experienced a 21.2% decrease from July 2013 to July 2014, according to CoreLogic, short sales are increasing in popularity as it allows homeowners to avoid damaging their credit and livelihood. Although short sales are an attractive option for many, what exactly is a short sale? Moreover, what happens if your property doesn’t sell?
Property Short Sales Explained
A short sale in Richardson is when a homeowner places his home on the market for less than what he owes the mortgage lender. Also referred to as a pre-foreclosure sale, these transactions allow homeowners the opportunity to pay off as much on their outstanding mortgage as possible as a means of avoiding foreclosure.
Benefits of a Short Sale in Richardson
The benefits of a short sale in Richardson are directly based on your current financial standing. That being noted, some of the most common benefits experienced by homeowners include:
I. Avoiding foreclosure.
II. Eliminating or significantly reducing mortgage debt.
III. Jump-starting credit score repair much sooner than if the property went into actual foreclosure.
IV. May be possible to obtain a new mortgage loan within two years after the sale, which is significantly quicker than the seven years it can take if you underwent a foreclosure.
Is a Short Sale in Richardson a Wise Choice for Me?
This is perhaps the toughest question to answer. Determining if a short sale in Richardson is ideal for you requires a full understanding of current and future financial standings. This may be the appropriate option for you if:
I. You’re ineligible to modify, or refinance, your current mortgage agreement.
II. You’re too behind on mortgage payments to realistically catch up.
III. Your mortgage is greater than the worth of your home.
IV. You’re no longer able to afford the home and its monthly expenses, and you’re ready to move on with your life.
Short Sale in Richardson Alternatives
In some cases, a short sale in Richardson isn’t the best option. While you may be behind on mortgage payments, it’s important to explore various alternatives before going forward with this selling process. The two biggest alternatives to this pre-foreclosure process include: (1) Receiving a loan modification, and (2) Activating private mortgage insurance.
Loan modifications, such as reducing required monthly payments or refinancing your current mortgage is much better than a short sale, if you qualify. Contact your mortgage company to determine eligibility. If you purchased your home with a down payment that was less than 20% of the total loan amount, then you were likely required to purchase private mortgage insurance. Let’s say you recently lost your job and that’s the reason you’ve fallen behind on your mortgage payments. If the PMI company believes you’ll recover from your current financial hardship, they may lend you funds to repay past due mortgage payments. While you’ll have to repay this loan, it can prevent from having to undergo foreclosure or a short sale in Richardson.
What If My Short Sale Was Declined?
After exhausting all other avenues to no avail, a short sale may be your ideal choice. The process of this foreclosure-avoidance option is very similar to a standard real estate transaction. You’ll work with a licensed real estate agent to price and market your home. While it may take up to 120 days to sell your home, it’s important to understand you may be declined by your mortgage lender to proceed with this process. If this happens, turn to a real estate company dedicated to purchasing homes that are on their way to the foreclosure auction block.
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