The sub-prime mortgage crisis that struck Phoenix and other places in the U.S. made an impact on many families. In fact, there are many who are facing foreclosure.
Some borrowers who are in danger of losing their homes are now wondering if short sales are for them. If you want to know whether a foreclosure or a short sale is the better deal for you, read on.
People who are not familiar with Arizona short sale laws often think that just letting go of the ownership of their homes is better than selling it through a short sale. However, foreclosure is something that really must be avoided. Aside from losing your house, foreclosure could bring a host of other problems, including having bad credit and ending up with a huge debt. With these things in mind it seems that any other alternative, including a short sale, is more advantageous compared to foreclosure.
Ideally, you can sell your home at a much higher price than you bought it. However, with a financial crisis, this is like shooting for the moon. Unless you are talking about a markdown sale like a short sale, it may be hard to sell your home. What are short sales? Basically, a short sale is a discount sale of your home. This means that you agree on selling your home at a much lower price, with the money you get used to pay off your mortgage. Some lenders are willing to forego the balance of the loan if homeowners agree on short sales. Short sales allow you to fully satisfy your debt even if the amount paid is lower than the amount owed.
People who are facing foreclosure should consider short sales. This is especially true for those who live in Arizona, where prices of homes have plummeted. Although people end up having neither home nor money in short sales, at least they will be able to get rid of their mortgage and other debts. With short sales you can use your income or money in your savings account to start on a new slate instead of using hard-earned cash for mortgage payments. And, since you might need to borrow again in the future, you have to avoid bad credit rating. You can do this with short sales.
Some think there may be a few disadvantages with a short sale, such as paying taxes for the difference between proceeds and the mortgage amounts. However, this has been solved due to new legislation, which omits paying additional taxes for short sales.
Once you decide that a short sale is for you, the best thing to do is find a real estate agent to help you. It is not really very easy to find potential investors on your own. Besides, with the help of professionals, short sales will be made expeditiously and will be handled well.
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