Receiving a foreclosure notice from your lender will make your stomach sink. Even though this is a challenging situation, it doesn't necessarily mean the bank will repossess your home.
There are many ways to prevent foreclosure, with a short sale one of the most common.
A short sale occurs when the lender agrees to accept less than the amount owed on the mortgage. Two things must hold true for this to be an option:
- You owe so much in back payments that you are unable to catch up
- The housing market is making it difficult to sell your home for as much as you owe
Is it the right answer?
Even though a short sale isn't the only way to prevent foreclosure, it's something many people in this situation consider.
To start, keep in mind that a short sale will require you to find another place to live.
The primary benefit of a short sale is that you're involved in the process. This is in contrast to a foreclosure, which is forced upon you by your lender.
Furthermore, foreclosure has a bigger impact on your credit report, thus making it more difficult to obtain a mortgage for another home in the near future.
If you're staring foreclosure in the face, learn more about your options for coming out on top. A short sale is an idea to consider, but you should also look into negotiating better terms and conditions with your lender.
By understanding your legal rights, you can implement the strategy that is best for you, your home and your finances.
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