If you are in financial distress and fear you will lose your home, you may feel frustrated and hopeless. Some of the alternatives presented to you may seem pretty much the same: you will lose your home. You can do a short sale, let the bank foreclose, or file bankruptcy. Your choices may have the same import as waiters on the Titanic asking diners sitting in water to their waists if they preferred coffee or tea.
Being in this situation is not what you anticipated when you scraped and saved for your home. However, if you can adopt the philosophy that homes and material things are replaceable, you can get through the situation and aim for a fresh start. Short sales, foreclosure, or bankruptcy can provide this. What you should aim for is the solution that has the smallest long term impact on your credit score and the greatest chance for you to move onto the next step with dignity.
Preserving your credit score is important. Not only is a good credit score necessary to get future credit and get it at a decent rate, it may impact your ability to rent or buy a house, get insurance, and even get a job. If you fall on hard times, you will take an inevitable hit. Your concern should be with preserving your score as best you can. The means that in order of the least damage to your credit, it is short sale, foreclosure, and bankruptcy.
Short sale: If your home’s value is not enough to pay off the mortgage, you could ask your lender to authorize a short sale where you can sell the home for less than you owe. This approach saves the lender time and money compared to a foreclosure and allows you have more time to plan your nest move as the process takes a while. You will lose 80 to 100 points on your credit request, but within 18 months the impact on your score should lessen.
Foreclosure: When the bank takes your home, you lose 200 to 300 points on score and can’t buy another home for at least three years. Given the large numbers of foreclosures these days, foreclosure might have a relatively small social stigma and economic impact over time.
Bankruptcy: Bankruptcy will remove your debts or allow you to repay them over time, depending on whether you file Chapter 7 or 13 bankruptcy. The number of points you lose depends on what your credit score was before you filed, but the event will stay on your record from 7 to 10 years. Despite the effect on your credit rating, this may still be the best choice if you are burdened down with a lot of other debts besides your mortgage.
Any of these methods can offer a fresh start to you if you are in trouble. If you want to sell your home now, Express Home Buyers can offer exciting alternatives. Whether you are in financial trouble, face foreclosure, have a property that needs a lot of work, or have an inherited house, we can sell your house fast. Because with us, it’s Guaranteed to Sell.