First thing to do is to contact your mortgage company to see if there are any options that would allow you to stay in your home. Most mortgage companies have lots of different programs to help you keep your house. Some of these are a deed-in-lieu of foreclosure, partial claim, mortgage modification plans, repayment plans and deferment plans.
If your mortgage is owned by Fannnie Mae or Freddie Mac you may be eligible for the Home Affordable Foreclosure Alternatives (HAFA) program, This government program is a type of short sale that definitely needs to be checked out. HAFA helps you avoid a foreclosure so it has a less negative effect on your credit. Once the sale is complete you do not have to repay any deficiency to the mortgage company and you may even receive $3000 to assist you in relocating.
However, if none of these options work, you may want to sell your home in a traditional short sale.
Here are some questions the mortgage holder will look at to see if your home qualifies for a short sale:
- Have you recently had a decrease in income because of a medical situation, divorce or job loss?
- Do you currently owe more on your home than it is worth?
- Are you unable to qualify for any options that would allow you to stay in the home?
Remember the goal of the short sale is to avoid having your home foreclosed. A short sale does affect your credit but not as badly as a foreclosure.
If you think that a short sale would work best for your situation, contact an experienced realtor, such as myself, for more information.