What is a short sale and how does it benefit you here in Baltimore?
If you’re thinking that question about yourself… great question!
In this article we’ll dive into that question so you as a Baltimore MD 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 Baltimore 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 a few reasons you may want to consider short sale on your Baltimore home
You Avoid Foreclosure and its Harmful Consequences
The greatest 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.
A foreclosure stays on your credit card record usually up to 7 years. This can lead to all kinds of financial problems, starting with the inability to obtain a new loan for a home.
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.
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 your job includes working with money, you may even face termination. This isn’t highly likely but it has happened to some.
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
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 are working with. If you are still having issues a year or two after a short sale, it may be time to shop around for another bank to work with.
Usually No Fees Involved
One potential benefit of the short sale is that the bank typically does not charge any fees. 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 that 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. Keep in mind, some real estate consultants may charge a fee for helping facilitate the foreclosure with your bank.
Our company, Baltimore Wholesale Property 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 Baltimore area house so connect with us by calling (443) 863-9808 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 in contact with 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 We buy Baltimore 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 traditional 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.