No matter who you are, you’ll soon realize both foreclosure and a short sale have different merits and demerits. First off, let’s learn about what a foreclosure is in Houston.
Our economic climate hasn’t favored anybody, and consequently many people find themselves in dicey situations once they realize it’s going to be an uphill battle paying the mortgage. A foreclosure, therefore, is a term that describes the process banks or any other lending institutions uses to repossess homes as a result of the homeowner defaulting on monthly payments. According to statutory laws, financial institutions have a right to foreclose on your house or any other property with the sole intention of recouping the money you were to pay them. So in a nutshell, the only time you need to worry about your home going through foreclosure is if you have skipped your payments. The ownership status immediately changes to that of the lending institution, and you get evicted right away.
With the help of Houston real estate agents, the property gets listed on the market within a short period. Alternatively, they try to find potential buyers by selling it at an auction. You need to be very cautious and work as hard as possible to avoid foreclosure because as a borrower it can severely dent your credit ratings. Furthermore, in the event you want to apply for another mortgage in a few years to come, you’ll experience a lot of hiccups.
You should also know that the foreclosure process works differently in various states. In this regard, you should visit the HUD Government website to confirm the foreclosure process information.
As opposed to foreclosure, a borrower will still own his or her home in a short sale.
In simple words, if you decide to put your property on the market and after closing the deal the sale’s proceeds fall short of the debts that got secured by liens against the home, then that transaction is what we refer to as a short sale. In this case, the borrower receives the option to choose whether selling the house will assist him or her in settling the debt. The downside to this option is that a deal can just as quickly fall through if one of the parties is not on board or decides to back out. Everyone needs to be on the same page because they all have a stake in the property.
Undoubtedly, all these options have repercussions, but a short sale is much better from the borrower’s perspective in that it saves their credit scores. It’s no secret that someone who has gone through foreclosure and wishes to apply for a typical mortgage will have to wait for approximately five to seven more years whereas a short sale allows individuals even to purchase homes immediately.
We would advise you first to have a sit-down with your creditors and come up with ways you can settle what you owe them without denting your credit score. Secondly, if no other option looks viable, try a short sale and pay the remaining amount once you get back on your feet. And lastly, if your meeting with bank officials yields nothing, you can still approach real estate investment companies like ‘We Buy Houses Fast Houston’ for a fair all-cash offer that will give you the amount you need to offset your loan.