What is a short sale and how does it benefit you here in Arlington?
If you’re thinking that question about yourself… great question!
In this article we’ll dive into that question so you as a Arlington VA home owner can tell what your options are during foreclosure or just if your home mortgage is underwater.
What is a Short Sale and How Does it Benefit You?
A short sale can be a smart way to mitigate foreclosure (here’s a great definition of what a foreclosure is in case you’re not sure) on a mortgage, although they can be difficult to attain in today’s market, they often prove to be a simpler way to resolve any debt left over from a loan.
Short sales were really common in the market a couple years back when the flood of foreclosures hit the Arlington market… but as foreclosures have slowed down and home values have climbed back up a bit… lenders are a little less likely to offer a short sale as an option as they used to be (but they are still doing a lot of them!).
Here are some tips on how a short sale can benefit you
Avoid Foreclosure: One of the primary benefits of a short sale is that it allows you to avoid foreclosure. Foreclosure can have severe consequences on your credit score and financial future, making a short sale a preferable alternative.
Minimize Credit Damage: While a short sale will still impact your credit score, it is generally less damaging than a foreclosure. By proactively addressing your mortgage debt through a short sale, you can mitigate the negative effects on your credit history.
Debt Relief: Through a short sale, you can eliminate or reduce the remaining mortgage debt that you owe to the lender. This can provide significant financial relief and allow you to move forward without the burden of unmanageable debt.
Potential for Faster Recovery: Unlike foreclosure, which can stay on your credit report for several years, a short sale may allow you to qualify for a new mortgage sooner. By resolving your mortgage debt through a short sale, you may be able to rebuild your credit and become eligible for future home loans more quickly.
Flexible Options: Short sales offer flexibility for homeowners who are struggling with mortgage payments. By negotiating with the lender, you may be able to arrange favorable terms that help you avoid the harsh consequences of foreclosure.
Navigating Short Sales in Arlington, VA
Arlington, Virginia, particularly those facing foreclosure or underwater mortgages. A short sale involves selling a property for less than the amount owed on the mortgage, with the lender’s approval, as a means to avoid foreclosure and mitigate financial repercussions.
While short sales were prevalent during the foreclosure crisis, their frequency has declined as the market stabilizes and home values recover. The benefits of a short sale include avoiding foreclosure and its detrimental effects on credit, financial stability, and future homeownership opportunities. Unlike foreclosures, short sales offer homeowners the chance to minimize credit damage and potentially qualify for a new mortgage sooner.
Additionally, short sales typically involve fewer fees compared to foreclosures, as banks aim to expedite the process and remove non-performing assets from their books. However, navigating a short sale can be complex, requiring homeowners to provide evidence of financial hardship and negotiate with lenders. Seeking assistance from real estate professionals, such as experienced agents or reputable companies like 3StepHomeSale, can streamline the short sale process and improve the likelihood of a successful outcome.
The article emphasizes the importance of exploring all available options and seeking expert guidance when considering a short sale. By understanding the implications and requirements of a short sale, homeowners can make informed decisions to alleviate financial burdens and secure their future housing needs.
Here are a few reasons you may want to consider short sale on your Arlington home
You Avoid Foreclosure And The Harmful Effects Of It
The best benefit of short sale is that you avoid a foreclosure on your home. Your mortgage lender accepts less than what is owed on your mortgage, leaving you without the debt that you cannot afford.
Foreclosure can lead to all kinds of financial problems, starting with the inability to obtain a new loan for a home because a foreclosure stays on your credit record usually for up to 7 years.
Even renting will become more difficult as your credit score would be affected, and you often have to disclose a foreclosure on a rental application. Foreclosures can also last a long time (up to 7 years as mentioned above), making you wait years to even qualify for a new mortgage.
Credit Worries
With a foreclosure, you face all kinds of ramifications with your credit. Buying a car and renting a house may be impossible through the normal bank loan routes.
If you work with money at your job you could even face termination if your employer puts a lot of stock in that kind of thing (most employers won’t but it has been done before).
A short sale relieves the debt that is left over from what is owed on the mortgage, letting both the bank and the seller move on. A short sale is also easier on your credit score, which can allow a homeowner the ability to recover in the long run. Your credit report will only show a pre-foreclosure status, which reduces your credit rating minimally compared to a foreclosure.
Buying a New House
A foreclosure can last for a long time, making it impossible to purchase a mortgage again for up to 7 years.
Short sales offer a little more flexibility for the seller, allowing new home applications only 2 years after the filing depending on the bank. It also makes a mortgage lender more likely to approve your loan than if you had a full foreclosure, getting you back into a home faster.
Again, this all depends on the actual bank / lender you’re working with… so if they’re giving you a hard time a year or two after a short sale… shop around and find another bank to work with.
Usually No Fees Involved
One potential benefit of the short sale is there are usually no fees associated with the process from the bank. The banks just want to get the note off of their books… and if it can be proven that your house is “underwater” (you owe more than your house is worth)… and you’re at the risk of walking away from the house… the bank may rather work out a short sale instead of going through a costly foreclosure.
With a foreclosure, your mortgage lender may tack on extra fees that only make the damage worse.
Some real estate consultants may charge a fee for helping facilitate the foreclosure with your bank… so check with them before you enlist a real estate agent or firm in helping you with this.
Our company, 3StepHomeSale may be able to guide you in the right direction on how to give yourself the best shot at a bank approving a short sale with your Arlington area house… so connect with us by calling (855) 918-4010 or shoot an email to us through our contact page here.
Getting a Short Sale – What You May Need To Provide
You will have to provide the bank with proof of being unable to pay your mortgage payments. This can be difficult and is best resolved by finding a good real estate attorney in your area that has experience dealing in this type of law.
If you don’t know who to contact or where to turn to see if a short sale may be a good option for you… get a hold of us.
We won’t charge a thing to discuss your situation with you and let you know your options.
And we can even give you guidance and pointers at absolutely no cost or obligation.
Sometimes we’re actually able to do the work for you or even buy the house from you to get you out from under that mortgage… so that may be a viable option for you.
We buy Arlington houses and we work with home sellers like yourself who are having troubles getting out of your house the traditional way… or who can’t (or don’t want to) go the usual route of listing with an agent.
Get a hold of us anytime to discuss your situation. We’re here for you!
Or, if you want to see what we can offer on your house… click the link below and fill out the form on the next page. We’ll make a no-obligation cash offer to you within 24 hours. At least that way you know whether that is an option for you or not.