I am sure you have heard the phrase that "ignorance is bliss." However, there are simply some times that you NEED to know what is going on so that you don't find yourself in trouble down the line.
Currently, there are many homes on the market that are in the process of a short sale.
But what does this mean? Is it the easy way out of a house loan that you no longer want? Do you really get to walk away from the debt owed without consequence? Not necessarily.
A short sale is a transaction in which the lender(s) agree to accept less than the mortgage amount owed by you, the current homeowner. In SOME cases, the difference is forgiven by the lender and the homeowner will not be liable for the difference in what they owe and what the house is sold for. In other situations, the homeowner must make arrangements with the lender to settle/pay off the remainder of the debt at some point.
The number of short sales has been rising as of late due to the recent economic crisis (higher unemployment) and the drop in home values and prices.
In general, a short sale costs the lender less than a foreclosure. Therefore, it can be a viable way for a lender to minimize its losses at a time when so many loans are in trouble.
According to the Idaho Association of Realtors, "A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially."
It is important that sellers understand the options and consequences of their decisions in the home selling process. Short sales are not always the best remedy to the situation, and many of the rumors about debt forgiveness are simply untrue.
0 comments:
Post a Comment