What are the Benefits of a Short Sale?
Todays question, what are the benefits of a short sale?
Well let’s start with the first benefit. No housing payments, should you decide to default on your mortgage, should you make a conscious decision to stop making mortgage payments during the short sale process you can continue living at home mortgage free and rent free until the transaction closes.
That means you can set aside some money, pay down some other bills or even save money in anticipation for moving. That is your first benefit, No housing payments for the duration of the process.
Next benefit, the effect on credit.
We've discussed this in previous videos, a short sale has certain advantages over a foreclosure in terms of impact on ones credit. Following a short sale transaction you're looking at about a 3-4 year cooling off period before you are once again eligible to borrow federally backed funds such as Fannie Mae and Freddy Mac. With a foreclosure where you are looking at closer to 5-7 years before you are even eligible to borrow those types of federally backed funds to finance the purchase of a new home.
There is certainly a distinct advantage of doing a short sale over doing a foreclosure in terms of one's credit.
The third benefit is the relocation incentive.
Within the context of a short sale transaction, often times lenders will offer you relocation money. They will incentivize the short sale.
One of the biggest and most well kept secrets in the mortgage loan servicing industry is this notion or this idea that banks actually want to foreclose. Well that’s not necessarily the case if they are presented with a viable option, like a short sale. In which case they will incentivize that in an effort to help avoid the foreclosure, and you can get some money out of the deal.
There is a relocation incentive within a short sale transaction to help you move.
Lastly, peace of mind.
I cannot stress this point enough.
Following a short sale transaction you'll get peace of mind, you'll bring peace and resolution to your mortgage debt problems. Following a short sale you can now start fresh and focus your energy, your efforts and resources on future income generating opportunities.