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Blog: Mortgage Underwater? Consider a Short Sale

You aren’t alone if you are underwater on your home mortgage or can no longer afford your monthly payment. A short sale is an alternative to foreclosure and offers you and your family a way out.

For many people times are tough and people are "underwater" on their home mortgage(s) - meaning the balance of their home loan or loans is higher than the current market value.

So, what are your options? You can keep struggling to pay your mortgage until your can’t pay it anymore and then let the bank foreclose on your home, you may refinance or secure a loan modification if you are eligible. What many people may not know is that there is another viable option.

For those who are ineligible to refinance or modify your mortgage, facing a long-term hardship, behind on your mortgage payments, have not been able to sell your home at a price that covers what you still owe on your mortgage and can no longer afford your home, consider a short sale.

A short sale is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale you can sell your home at a price that allows you to only pay off an amount less than the entire balance of loans secured by the home.

There are many benefits to a short sale. For example, it can eliminate or reduce your mortgage debt. It helps avoid the negative impact of a foreclosure and starts repairing your credit sooner than if you went through a foreclosure. In some cases you may be able to purchase a home sooner (in as little as two years) than if you experienced foreclosure (at least seven years).

You may even be eligible to receive relocation assistance from the bank that holds your title to use toward your moving expenses and to make the transition easier. Think about your options and what work best for your situation. 

According to the Multiple Listing Services (MLS) database, over the past year the average SOLD price for short sales in Carmichael increased by 42 percent from $188,000 to $267,000.

If you would like additional information on short sales, whether buying or selling, I would be happy to help. Let me know if I can throw you a life preserver and help you out!  

Email me at: jfrisk@millerrealtynetwork.com.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Andrew Gayner May 21, 2012 at 11:06 PM
Will a short sale hurt my credit?
Julianna Frisk May 24, 2012 at 03:36 PM
It will have an effect on your credit, but the impact is less with a short sale than if the house is foreclosed on.

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