Every year there are thousands of homes throughout the United States, that go into foreclosure. This happens for a number of reasons. Here are just a few of the most common reasons why people find themselves facing foreclosure:
There are a variety of options that are now available for people who are facing foreclosure and one of these options is a short sale. However, there are many people who have the idea that a short sale and a foreclosure are one and the same.
With this option, you'll end up having your lender take away your home. Also, you could end up owing the money even after you lose the home as well as the costs of the action of foreclosure. With a foreclosure you will find that your credit report will suffer and the foreclosure will be on your report for years in the future, making it so you have a difficult time getting any kind of credit in the future. It is important that you do your very best to avoid foreclosure at all possible, realizing that this is the worse option you could ever have.
In a nutshell a short sale is when you are facing foreclosure and someone comes in and purchasing the home from you for less than the amount that you owe on your home. Of course if this is an option chosen, you'll find that the lender will have to agree to go along with this option. The lender will have to forgive the rest of the balance that you owe if you end up going with a short sale.
If your home is up for foreclosure, you'll find that short sales can be considered instead of foreclosures. This is a very popular option for people who find themselves dealing with bad financial problems and a foreclosure looming in the distance. Although it's usually easy to find someone that will purchase the home in a short sale, you'll find that it is more difficult to make sure that you get the lender to agree to let you do the short sale. They will not always allow you to do this, but it definitely is an option that you should check into if you are facing a foreclosure and you have exhausted other possible options. However, it's important to remember that the longer you wait to suggest this option to your lender and the further behind you get in your payments, the less likely your lender is to allow you to go with the short sale option.
Although there are definitely a few benefits to going with a short sale, such as avoiding a foreclosure, you'll also find that there are definitely some disadvantages to going with a short sale as well. Sure, it will keep you from having to go through a foreclosure on your home, but it will definitely affect your credit as well. Some people seem to have the idea that a short sale doesn't affect your credit, but it can have a huge effect.
When you are taking a look at foreclosures and short sales, you are going to find that both options can affect your credit rating. They both can be a huge problem, lowering your credit score and taking you months to recover from. However, the short sale will usually only stay on your credit for four years while a foreclosure on your record is going to stay there for about seven years. In both cases credit can be cleaned in a much shorter amount of time.