What is a short sale and how does it benefit you here in Minnesota?
If you happen to be pondering the same question about yourself, kudos to you for considering your options. This article is dedicated to helping Twin Cities Minnesota homeowners navigate the difficult situation of foreclosure or an underwater home mortgage, so you can determine the best course of action for your unique circumstances.
What is a Short Sale and How Does it Benefit You?
If you’re facing the prospect of foreclosure on your mortgage, a short sale could be a wise solution to explore. In case you’re not familiar with the term, a foreclosure is when a lender takes possession of a property due to the owner’s inability to make mortgage payments. While short sales can be challenging to secure in today’s market, they often present a more straightforward way to settle any outstanding loan debt.
Short sales were a common practice a few years ago when foreclosures inundated the Twin Cities market. However, as the frequency of foreclosures has decreased and property values have rebounded somewhat, lenders are now less inclined to offer short sales as a solution, though they are still being offered frequently.
Here are a few reasons you may want to consider short sale on your Minnesota home
You Avoid Foreclosure And The Harmful Effects Of It
One of the most significant benefits of pursuing a short sale is that it allows you to avoid the devastating effects of a foreclosure on your home. By agreeing to accept less than the full amount owed on your mortgage, your lender enables you to free yourself from debt you simply cannot manage.
Foreclosure can have far-reaching consequences, beginning with the challenges of securing future loans for a home. Foreclosure stays on your credit report for up to seven years, making it challenging to secure financing in the future. Renting becomes more complicated as well because landlords often require disclosure of a foreclosure on rental applications, and your credit score can be adversely impacted.
Moreover, foreclosures can last a long time, making it even more difficult to qualify for a new mortgage. With a foreclosure on your record, you may have to wait for up to seven years before you can even think about owning a home again. Therefore, pursuing a short sale could save you from these long-term financial consequences and offer a faster path to financial recovery.
Credit Worries
Foreclosure can have far-reaching consequences on your credit, making it difficult to secure loans for other major purchases such as cars or homes. Even finding a place to rent can be challenging since landlords often conduct credit checks that may impact your ability to secure a lease. Additionally, if your job involves working with money, you may face termination if your employer considers a foreclosure a significant risk.
On the other hand, a short sale can alleviate the debt remaining from your mortgage, enabling both the lender and the seller to move forward. Moreover, a short sale is generally less harmful to your credit score, providing a more favorable opportunity for long-term recovery. Your credit report will only show a pre-foreclosure status, which has a minimal impact on your credit rating compared to a foreclosure.
By choosing a short sale, you can protect your credit score, minimize the financial consequences, and pave the way to financial stability in the future.
Buying a New House
It’s crucial to understand the long-term consequences of foreclosure on your ability to obtain a mortgage again in the future. Typically, foreclosure stays on your credit report for up to seven years, making it extremely difficult to qualify for a new mortgage. This can be frustrating and emotionally challenging for families who dream of owning a home again.
On the other hand, short sales offer some flexibility for sellers, allowing them to apply for a new home loan as early as two years after the filing, depending on the bank’s policies. Compared to a full foreclosure, a short sale is also more likely to be approved by a mortgage lender, giving homeowners a better chance of getting back into a home faster.
However, it’s important to note that the specific bank or lender you work with will play a significant role in the outcome of your short sale. If you experience challenges or difficulties working with a particular bank or lender, don’t give up hope. Instead, shop around and explore alternative options to find the best fit for your unique financial situation.
By understanding the implications of foreclosure and short sales and working with knowledgeable professionals, you can make informed decisions and take the necessary steps to achieve your homeownership goals.
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, Matt Buys Houses MN 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 Minnesota area house… so connect with us by calling 651-615-8999 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 Minnesota 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.