Selling your home and moving into another purchase is a common transaction that most sellers experience.  Understanding all of your options and consulting with your agent will save you time and potentially money.  Can you possibly afford to keep your current home as an income property and purchase a new one?  Is renting more cost-effective than owning in your new desired area?  Will you have to pay capital gains tax after your sale?  Being able to answer these questions and others will result in wise investments and good financial health.

A short sale is a viable option to avoid foreclosure.  The lender that holds the mortgage will decide what amount, if any, they are willing to accept below the value of the loan.  The process can be arduous but is often better than allowing a foreclosure.  A big negative of executing a short sale is the effect on a credit report.  Short sales can stay on a credit report for 2 to 7 years, like a foreclosure.  However, short sales are often reported as a charge off from the lender, meaning that the loan was settled for an amount less than what was owed instead of a complete default.

A foreclosure is defined as the action of taking possession of a mortgaged property when the mortgagor fails to keep up their mortgage payments.  This has a huge negative effect on a credit report and can hinder someone’s ability to buy a house, car, or even leasing a property.  There are ways to avoid foreclosure that should be considered.  Short sales are an option that are commonly utilized.  Other options include loan modifications, possible refinance, moving out and renting the home, finding a private investor to help with payments, or hire with a mortgage rescue company.  Some of these options are unorthodox but should be considered to avoid the pitfall of foreclosure.