By: Dianne Bryan
We all know the perceptible , if you stop making your mortgage payments while in short sale, you will be facing foreclosure and ruined credit. All decisions to stop making your payments while in a short sale are personal. Most potential the reasons you are in a short sale situation are the same reasons you can not continue to make the mortgage payments and keep equity insurance. Sometimes but not very often a lender will forgive missed payments, but will still file a deficiency notice. Some people in a short sale can not make the payments and save enough to move. Short gross sales can take up to a year to sell.
A short sale is not a guaranteed sale. Short sales are based on many factors, and the bank has the final decision. If you receive an offer from a potential buyer,you present it to the lender, and they dismiss the offer, you stopped making your payments , the bank can and probably will start foreclosure proceedings. This can only be stopped if you are able to come up with all back payments, then the short sale can go on to another potential buyer and you will not be in foreclosure. But you probably used your moving money you saved to pay the back payments. Be produced to wait. Many short sales can take up to 18 months or more to close, then you still have to be readiness for the deficiency and the moving cost. Although a short sale will only effect your credit for 2-3 years, if you make all the payments, deficiency payments, and moving expenses, you can get another home with a FHA home loan within the 1st to 2nd year. If you don’t make payments and go into foreclosure, this will be on your credit for 7-10 years and you could not buy another home within that time.
Depending on the timing, some banks will except bids quicker and close sooner, if you do not make your payments, to avoid the very expensive cost of a foreclosure. The best time to get a fast short sale close is at the last quarter of the year- before the end of December. This is when banks have to prepare their year end financial reports and they do not want a foreclosure to bleak mark their record.With a short sale they can except their loss and fresh the books to set about the new financial year. They know a vacant home will be destroyed in a bad neighborhood. They want homes to be occupied and kept up, to help bring back neighborhood home values. About only 20-25% of short sales actually close, 30-45% go to foreclosure, and the rest are just walked away from.
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