This Article Short Sale Vs Foreclosure May Help You Rest Better At Night

Are You Behind On Payments or Owe More Than Your House Is Really worth? These details Short Sale vs Foreclosure may help you rest better at night.

If you're like most home owners, you never planned on missing a mortgage payment. It just happens. You miss one payment, and then another, and one more. In a short time, you owe thousands of dollars and have no way to pay the huge amounts that are overdue

There are several ways to prevent foreclosure.

Or, you may still be making your repayments but you have an "upside down" or "underwater" mortgage (also called negative equity), all terms to describe when you owe greater than the existing market value of your home. You're not alone - many home owners have negative equity due to the condition of the housing crisis which has caused most san jose real estate prices to drop year after year.

If you're behind on payments or owe more than your home is worth, lenders (bank who possesses your home loan) are ready to give you sensible options in order to prevent foreclosure..

This is only a brief sample of the many options to short sale vs foreclosure addressed in this report. The recommendations and methods for every option change quickly to deal with the volume and needs for each bank and in each state.

OPTION 1: Foreclosure

If you do nothing, you will probably face foreclosure from your lender (bank who possesses the home loan). If you can't make your payments and do not seek out help, the lender has got the right to foreclose on the property and auction it off to recover its investment from the earnings of the sale.

OPTION 2: short sale vs foreclosure

A short sale consists of selling your home for less than you owe on the loan. That's why it is known as selling short sale.

However, if you can get approval from the lender to sell your san jose real estate for less than the amount owed, you will prevent foreclosure and the associated effects.

A short sale vs Foreclosure is often not approved by the lender until you have a real difficulty and no belongings. But if you qualify, banks would instead do a short sale because it lowers legal charges and they end up netting more cash when the property is sold.

A short sale versus Foreclosure does have its own complications which you will need to understand before going through the procedure, and a your credit will be affected from either scenario. But a short sale has much less implications than a foreclosure. For instance, with a foreclosure it can be at least 5 years before you can qualify to buy another house; however, with a short sale you can qualify in 2 to 3 years.

Here's the actually bad news - if your san jose real estate can't be sold for the full amount of what you owe, a "deficiency judgment" might be issued against you for the unpaid balance of the loan. A foreclosure and deficiency judgment can seriously affect your credit and the ability to be eligible for a loan for years in the future. In some cases it can also prevent you from getting a job.

If you are facing a hardship and feeling like foreclosure is the only thing that you can do, now is NOT the time to stress and panic. Rather it's time to explore more options and make the best decision. Doing nothing or making a poor decision could be harmful for many years. A foreclosure costs thousands more than just the loss of your house, so it's important you continue to check out your options and consult with a professional who knows the actual answers to your questions.