For many people going through the foreclosure process, there is a constant concern about what will happen if they lose their home. That said, however, the question of what will happen to your living situation is not necessarily a binary choice between keeping your home and going homeless. For some people, a short sale may be a good idea, but is it right for you?
Explaining the Short Sale
In the context of real estate, a short sale is when someone going through the foreclosure process chooses instead, with the permission of their mortgage lender, to sell their property on the market. Typically, a short sale will be for less money than the value of the mortgage, with the remainder either paid by the homeowner, or forgiven by the lender. This allows someone to avoid the worst possible case of a foreclosure, allowing them to leave their home on their own terms.
The Benefits of a Short Sale
One of the biggest benefits of a short sale is that you do not go through a full foreclosure process. This limits the impact that losing your home will have on your financial history, and gives you an opportunity to seek other living arrangements. It also means you will not need to worry about the burden of paying off your mortgage, because typically once the short sale is over, the terms of your mortgage will be satisfied.
The Drawbacks of a Short Sale
The biggest obvious downside to a short sale is that you will not be able to remain in your home, even though you technically have not been foreclosed on. There will also be some negative consequences to your credit history, at least in the short run. However, compared to the negative effects of foreclosure, a short sale is generally seen as much preferable, in terms of the potential impact to your financial future.
Is a Short Sale Right For You?
Ultimately, a short sale is just one tool among many for helping people who are struggling to pay their mortgage. There are plenty of other ways that people dealing with financial distress can seek to deal with a potential foreclosure without necessarily needing to have their home taken away from them. The only way to know for certain if a short sale might be good for you and your situation is to speak to a lawyer with experience handling foreclosure cases, who can advise you on your rights and help you to find a solution that works best for you.
At David J. Lorber & Associates, PLLC, we assist clients throughout New York who are at risk of losing their homes to foreclosure. We will explain your options and guide you in making the best decision for your circumstances. Call us at (631) 750-0900 or contact us online to schedule your Free consultation at our Setauket office.
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