"You've missed a mortgage payment, or have just lost your job and expect to do so in the next few months. Or maybe you've already missed a few and your lender has sent you a default notice. The risk of short sale and foreclosure have become more and more present in the past two years, yet home-owners are still in the dark about how to deal with them. It partly explains why the Short Sale foreclosure process often fails: a lot of people just take the wrong approach. If you think you're at risk, here's a list of things you'll need to know.
How Much You OweYour chances of avoiding short sale and foreclosure, and thus staying in your home, are largely dependent on your total debt. For instance, most short sale foreclosure alternatives take into account your debt-to-income ratio, or how much of your monthly income goes into paying your mortgage and other debts. Consult a real estate agent or attorney to see if your DTI qualifies you for mortgage aid, or whether you're really better off with a short sale foreclosure.
What Your Options Are:
Mortgage troubles aren't a one-way ticket to short sale and foreclosure. There are ways to resolve things with your lender and even keep your home. Start by calling up their loss mitigation department and asking about their programs. Some home-owners qualify for less complicated alternatives such as
loan modification or refinancing. Opt for a short sale foreclosure only if you've exhausted all other options.
Possible Credit Effects:
No matter what you choose, you can expect at least some damage to your credit score as a result of falling behind. But that shouldn't keep you from trying. Focus on minimizing the damage and rebuilding your score, rather than the credit effect itself. Your short sale agent or attorney can help you better understand the credit implications of short sale and foreclosure, and help you find ways to deal with them.
What Happens After:
Whether you keep or lose your home, you need a plan for the months or even years following the short sale foreclosure. For example, your borrowing options may be limited for a while, so create a monthly budget that will keep you from relying too much on credit. You can also start building a positive rental history (if you opted for a short sale) so that you can re-establish your credit score and qualify for a new mortgage sooner."
Author is a professional short sale/ real estate agent who completely have a handle on the Short Sale process and helps people who need short sales, or who want to sell for any reason. He also helps people who are having difficulty but want to keep their home. Visit his website to get more information about Short Sale, Mortgage Short sale: - http://www.shortsalesafe.com
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