Congratulations on your decision to sell your home. We are always happy to engage and help you figure out the best solutions for your needs. We have a range of options to suit every situation.
If you think your home is at risk of foreclosure, don’t panic, take action!
Severe Results of Inaction
In case your home is facing an imminent foreclosure don’t just sit back and let the situation get worse. Always try and actively seek a solution however serious your situation may seem. If you fail to take appropriate action these are some of the unfortunate outcomes:
- You are likely to lose your treasured home to foreclosure.
- Possibly the scariest outcome of the potential loss of your home is to become homeless.
- You may suffer the unfortunate shame of getting escorted off your property by the sheriff.
- You stand to lose equity in your property which you’ve worked so hard to build.
- The implications of inaction lead to hefty fines, fees and you could incur daily increments of interest payments.
- A foreclosure will negatively affect your credit report and this will also reflect in public records.
- If you choose to file bankruptcy it will appear on your credit report for up to 10 years and you will not be able to buy another home with a mortgage for a period of no less than 2 years.
Fortunately, there is hope but it will all depend on your circumstances.
Another option is to arrange a Short Sale with your Bank
A short sale is a transaction involving the sale of a property to an investor/wholesaler with permission from the homeowner’s lender. This agreement dictates that the homeowner will sell the property for an amount that’s lower than the outstanding debt in order to avoid foreclosure. Basically, this is a way of hedging major financial losses when you are unable to service your mortgage.
For you to qualify for a short sale you typically have to be able to prove that you are undergoing financial hardship that prevents you from fulfilling all your mortgage payments. If a short sale is one of your options you should know that is normally a lengthy process that requires plenty of consultation and follow-ups with mortgage lenders, legal professionals and the homebuyer.
If your lender agrees to a short sale it is important to consult a qualified attorney who has a team that is experienced in short sale transactions.
Pros
- If you manage to get a decent short sale offer you’ll manage to pay off your outstanding mortgage payments.
- Even if you’re not able to pay off your entire debt you’ll reduce it significantly which can help maintain a decent credit rating.
- Any action that helps avoid foreclosure is beneficial to you if you’re in financial distress.
Cons
- Your credit rating is likely to take a big hit even after a short sale and could go down by up to 125 points depending on your circumstances.
- A lowered credit score will reduce your chances of accessing loan facilities, renting an apartment and may increase your insurance rates.
What Information should you Submit for a Short Sale?
Normally, in Florida you are required to submit what is known as a short sale package to your lender. This is a set of documents used to confirm that indeed you are in financial distress. This is basically how you justify your need for a short sale. The packages may differ depending on your circumstances and lenders also have their specific requirements. The package typically includes the following:
- A hardship letter
- Your tax returns for the past two years including W-2 tax forms
- A personal financial letter – this basically outlines your current financial position based on assets and liabilities
- Your recent bank statements dating back at least one year
- Copies of the purchase agreement and the listing agreement
- Proof of earnings and assets
Why you should consider a short sale
When you are unable to service your mortgage or home values plummet, you are likely to get to a point where you owe the lender more than the worth of your home. In such situations your mortgage may be referred to as ‘underwater’ or ‘upside down’.
Bottomline – When you find yourself facing a foreclosure, a short sale is one of the options you have and if you have a family, it could be a prudent stop-gap measure as you look for somewhere to relocate.
Most pre-foreclosure home buyers look for homes that are not in very good shape so that they can fix them up and resell. So you should not have to worry too much about doing renovations before initiating a short sale transaction.
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Book a Free 15 min Solutions Consultation or contact us by 386-663-1360 / info@jadecrew.net
We Help you find resolution to complex real property Concern – Sean Allen