The Biggest Benefit of Doing A Short Sale

According to procedures from Fannie Mae (in regards to conventional loans) and the Federal Housing Administration (in regards to first-time home buyers assistance loans - "FHA loans"), a homeowner who is foreclosed on by their lender may have to wait 5-7 years before they will be allowed to qualify for another home loan.

However, if that same homeowner sells their home as a short sale (called a pre-foreclosure), the may qualify in as little as 2-3 years. That is a chance to own a home again 3-4 years SOONER than allowing the home to go to foreclosure.

In this market, it is very likely that home values will still be low in the next 2-3 years. There are many foreclosures that banks still have to sell, and many people every day are still going into default due to alarmingly lost value in their homes (a large percentage of homes today are "upside-down," meaning the homeowners owe more money on their mortgage than the home is worth). Because of that, someone who short sells their home now, can use the money they are saving (paying only rent instead of a mortgage) to pay off debt and save for their next home purchase. Then, they would be able to purchase a home sooner, and probably for much lower of a cost than if they were foreclosed on, waited 5-7 years, and purchased a home when home values had more time to go even higher.

For more information, or to ask questions about this tremendous benefit to doing a short sale, please reply to this post, or give me a call at 661-616-3601.