If your mortgage is costly and will result in you paying more than your home is worth, something that you may want to consider in the future is a short sale. A short sale prevents foreclosure and helps borrowers avoid paying back the difference between what they owe on a mortgage and the sale price of a home.
Short sales have benefits, so if you’re struggling to pay your mortgage and can’t sell your home to get out of debt, then it might be a good choice. With a short sale, you can:
- Sell your home for less than you owe
- Avoid a foreclosure on your record
- Avoid having to pay the difference between the home’s sale price and what you owe on your mortgage
A short sale can be a good way to get out of a tough situation. You might find that the price you paid for your home is no longer what it commands on the market.
Short sales aren’t always simple to set up. You will need to get approval from the lender, which can take many months. The other difficulty is that you will need to have a buyer make an offer before you can seek the short sale.
Here’s what a short sale looks like. As an example, a buyer may offer $100,000 for the home, but you still owe $110,000. You could apply for the short sale and ask that the remaining $10,000 difference is forgiven.
If you’re interested in a short sale, talk with your attorney about the pros and cons. They will be able to help you with your application and support you through the process.