What is a short sale and how does it benefit you here in Santa Clarita?
If you’re thinking that question about yourself… great question!
We’re going to dive into that question and cover a bit more so you as a Santa Clarita CA home owner can understand the different options you have when facing foreclosure or if you’re just upside down on your mortgage.
What is a Short Sale and How Does it Benefit You?
A short sale is one of the many options you have when facing foreclosure. It can actually be a pretty smart way to mitigate a mortgage foreclosure (here’s a great definition of what a foreclosure is in case you’re not sure) . Although in today’s market, they may be difficult to obtain, if you’re able to get a short sale approved by your lender it is a good way to remove the remaining debt on your loan.
Short sales were very prevalent in past times when the Santa Clarita market was being flooded with foreclosures but as foreclosures slowed down after the recession, when housing prices started going up again… banks and lenders became a little less likely to take a loss by taking a short sale (but they still do!). However, with the after affects of the COVID-19 pandemic, Santa Clarita may soon become flooded with foreclosures. So the opportunity for short sales may return.
Here are a few reasons you may want to consider short sale on your Santa Clarita home
You Avoid Foreclosure And The Harmful Effects Of It
One of the main reasons a short sale is a great way to avoid foreclosure on your home, is that a lender is accepting to less than what is owed on your mortgage, this allows you to wipe away the debt that the house can’t pay off.
Having a foreclosure on your record has many lasting affects, one of those being the inability to acquire a new loan because a foreclosure may stay on your credit for up to 7 years.
You may be thinking that you may just get a rental, but it’s not that simple. Most landlords and property management companies check your credit before approving you for a rental. They need to know that you are someone that pays bills on time and that you can keep up with your rent payments. So, having a foreclosure can make it really hard to find a new place to live.
With a foreclosure on your credit, you face many ramifications that may not be foreseen. You may not be able to buy a car, rent a house, or help your child get student loans for college.
If you work with money at your job you could even face termination if your employer puts a lot of stock in that kind of thing
Also, if you work with a lot of money at your job it’s possible you could face termination (most employers won’t but it has been done before).
A short sale relieves the debt that is left over from what is owed on the mortgage, this allows the seller and bank to have a clean break and move on. While a short sale will still affect your credit, it won’t be as drastic as a foreclosure. It typically will only show a pre-foreclosure status not a foreclosure.
Buying a New House
A foreclosure can last for up to 7 years, which can make it nearly impossible to get a mortgage on a new house during that time.
Short sales offer a little more flexibility for the seller, allowing new home applications only 2 years after the filing depending on the bank. It also makes a mortgage lender more likely to approve your loan than if you had a full foreclosure, getting you back into a home faster.
Though, this is dependent on the lenders and banks that you are dealing with… if they still give you a hard time a couple years after a short sale, you should try shopping around for a new bank or lender.
Usually No Fees Involved
Another potential benefit of a short sale is that there are usually no extra fees tacked on by the bank. The banks usually just want the non-performing loan off their books… and if it can be proven that the value of the home is less than the loan amount and you’re at risk of walking away from the house… then the bank may be open to a short sale instead of handling an expensive foreclosure.
With a foreclosure, your mortgage lender may tack on extra fees that only make the damage worse.
Some real estate consultants may charge a fee for helping facilitate the foreclosure with your bank… so check with them before you enlist a real estate agent or firm in helping you with this.
Many real estate consultants may also charge fees for helping facilitate a short sale with your bank… so make sure to do your research and ask before working with a real estate agent or firm to aid the process.
Our company, SK Home Buyers may be able to guide you in the right direction on how to give yourself the best shot at a bank approving a short sale with your Santa Clarita area house… so connect with us by calling (661) 535-0778 or shoot an email to us through our contact page here.
Getting a Short Sale – What You May Need To Provide
You will need to provide some type of proof that you’re unable to pay your monthly mortgage payments. This can be difficult and is best resolved by finding a good real estate attorney in your area that has experience dealing in this type of law.
If you don’t know who to contact or where to turn to see if a short sale may be a good option for you… get a hold of us.
We won’t charge a dime to discuss your situation with you and let you know your options.
And we can even give you guidance and pointers at absolutely no cost or obligation.
Sometimes we’re actually able to do the work for you or even buy the house from you to get you out from under that mortgage… so that may be a viable option for you.
We buy Santa Clarita houses and we work help home sellers like yourself who are having troubles getting out of your house the traditional way… or who can’t (or don’t want to) go the usual route of listing with an agent.
Get a hold of us anytime to discuss your situation. We’re here for you!
Or, if you want to see what we can offer on your house… click the link below and fill out the form on the next page. We’ll make a no-obligation cash offer to you within 24 hours. At least that way you know whether that is an option for you or not.