Falling behind on your mortgage and facing foreclosure is stressful. If you receive a notice of impending foreclosure, take action right away. There are options available to help avoid foreclosure, including a short sale. The short sale process allows you to sell the home for less than your outstanding mortgage balance upon approval from the bank.
There are some things to consider when deciding if a short sale is right for you.
Do you have any other alternatives?
A short sale should be a last resort to avoid foreclosure. Consider whether you have access to a savings account or retirement fund you can borrow against to get your mortgage out of default. You might also be able to rent your home and use the rental income to catch up on the payments if you have somewhere else you can live. Some mortgage relief programs will help catch up on your loan if you qualify.
Will your lender cancel your remaining balance?
Before you can finalize a short sale on your home, your mortgage lender must approve it. Sometimes that approval includes a complete settlement of your account while other cases require you to pay the remaining balance. Consider what your financial situation supports and decide accordingly.
Short sales are a viable alternative to foreclosure for those homeowners who cannot meet their mortgage obligations. When you cannot keep your home, a short sale might provide financial relief. Talk with your lender about your short-sale opportunities before your foreclosure causes long-term damage to your credit report.