If financial hardship has made it impossible for you to remain in your home, you have two options - Short Sale or Foreclosure.
This summary will help you understand the consequences of these two processes.
SHORT SALE
A short sale is a transaction in which the lender has agreed to accept less money than they’re owed on the mortgage loan. If you need to sell your home, but you owe more than the home is worth, this may be a good option for you.
In order to qualify for a short sale, you must first provide your lender with:
- Documented proof of financial hardship
- Recent sale prices of comparable homes
- The lender must then approve the short sale before you can list the home and each offer must be reviewed by the lender before you can accept it and close on the sale.
If you manage to avoid late mortgage payments, a short sale can reduce your credit score by as little as 50 points. Late payment, however, can result in drops of as much as 200 points.