In this article, we will discuss short sales and foreclosures, to determine their comparative potentials, and overall advantages for the buyer or home loan applicant.
Foreclosure
The property can be foreclosed upon if the borrower will repeatedly fail to perform timely mortgage payment. Basically, a foreclosure entails that the money lender has now the owner of the property, and the borrower has been evicted. A foreclosure will not only cause severe damage to the credit score of a borrower, but more importantly, the foreclosed property will be open to sale in an auction or even through real estate agents. The owner or borrower will completely lose all rights to the property.
Short Sale
A short sale can be thought of as a better alternative to foreclosures for it reduces the extra expenses and fee payments for both, the lender and the borrower. Compared to a foreclosure, it also aids in reducing the damaging impact on the credit scores of the borrower. However the procedure of a short sale tends to involve a great many legalities and paperwork for both the parties involved.
Benefits & Eligibility of Short Sales & Foreclosures in Atlanta, GA
When a homeowner or borrower fails to make their home loan payments constantly, the lender can initiate a foreclosure. This will allow the lender to assume ownership of the property that the borrower used as a pledge as collateral for their home loan. Once the property has been foreclosed upon, the lender has the liberty to sell it off, and use the money raised to balance the amount borrowed for the mortgage. This will ruin your credit and make it hard for you to purchase another home in the future.
On the other hand, short sales can be accessed by borrowers if their home loan payment is a lot more than the current market value of their property. The homeowner can access a short sale in both situations, when their mortgage payments are too high or when they have failed to make them on time. However, in order to complete the paperwork of a short sale, the borrower needs the approval of the lender. And according to the laws of Atlanta, GA, the lender is not under any obligation to accept a short sale until it is favourable. Note: Short Sales look better on your credit than foreclosures.
Short Sale Benefits:
- It looks better on your credit (Did you know that some lenders will even agree to report a short sale as “paid” on your credit?)
- Prevent’s Foreclosure
- Saves you money
- Gives YOU as the homeowner more control
- Can put extra money in your pocket
Facing Foreclosure? Contact Kereen Henry today and ask how she can help you complete the paperwork for a short sale to save your credit.
