Short Sale -vs- Foreclosure
Foreclosures can be a devastating fact of life that more and more Minnesotans are faced with every day. If you cannot keep up to your mortgage payments and are struggling with debt, then your lending company may foreclose your home. This means the lending company will repossess your home and you will be left not only without a home but also with a poor credit report to boot. A short sale is a smart alternative to foreclosure that allows a home owner to sell their home on the market. If the price offered is close to the market value and if the home owner has the right advice from a professional MN short sales agent, then the lending company may allow the sale to go through and ignore the price difference. Although the lending company may be losing a little on their investment, they are also able to avoid the process of foreclosing a house which is something all lending companies strive to do.The home owner is able to sell their home and stay out of the red.
The Three Differences between Minnesota Short Sales and Foreclosure
1. The biggest difference between a short sale and a foreclosure is that a short sale allows you to start over. While a foreclosure is considered one of the most devastating and stressful financial situations, short sales are the preferred alternative. Your mortgage is considered “paid” which means you are free from any burdens in the future. A foreclosure will show up on your credit reports meaning that potential employees, landlords and credit bureaus can see this big black mark on your record. With a short sale, there is no black mark.
2. In terms of your credit report, a short sale will not be able to wipe the slate clean. If you have missed some payments on your house due to the pre-foreclosure status, then there is nothing you can do about that for now. However, a Minnesota short sale will not make your credit any worse. Foreclosure, on the other hand, can lower your credit report by 300 points which can have devastating consequences to obtaining loans later in life.
3. Another big difference between short sales and foreclosure is that with a foreclosure, you will not be eligible for a government insured loan for 5 to 7 years. This can seem like a lifetime for families who need the support. In a short sale, we have seen this ineligibility shortened to as little as 12 months! Choosing to have a Short Sale in Wright County & the Western Suburbs it is import and when looking at foreclosure and a short sale side by side, it’s easy to see which the preferred choice is. However, many people do not even realize there is an alternative to foreclosure. Furthermore, many others do not have the time or the energy to fight their financial battles. This is why it is so important to get the help you deserve and speak to an agent that is educated in foreclosure avoidance & short sales. We can assess the situation to see if your home could qualify for a short sale. When it comes to avoiding foreclosure, it’s definitely worth doing a short sale!
4. In addition to having a Realtor that is an expert in working with short sales who has the CDPE designation, it is highly recommended to consult with an attorney when considering your options and working through the process. They should also review your documents before you sign them. For just $26 a month, Pre-Paid Legal Services will do all this for you. This is an incredible value! Click the following link for more information.