Short Sale vs Foreclosure – What’s the Difference in Westchester County?

Whether you’re a buyer or a borrower/seller, a short sale, and foreclosure each present different advantages and difficulties.

What Is A Foreclosure In Westchester County, New York?

In simple terms… “A foreclosed home is one in which the owner is unable to make his mortgage loan payments and the bank repossessed the home” (source).  If you stop making your house payments… your lender has the right to foreclose on your property so they can attempt to recoup their money that was lent to you. 

A home is typically foreclosed on when a borrower fails to make mortgage payments. The lending institution assumes ownership and possession of the property, evicting the borrower. These properties are then sold at auction or more traditional means utilizing the service of real estate agents. A foreclosure can damage the credit rating of a borrower, and make it very difficult to obtain a mortgage for many years.

Depending on the state that you live in… a foreclosure can work in different ways. Check out the foreclosure process information over here at the HUD Government website.

What Is A Short Sale?

In a short sale, the home is still owned by the borrower.

The definition of a short sale is… “short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts and where the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt” (source: Wikipedia)

In some cases, a short sale is an option agreed upon by borrowers and lenders. In a short sale, the home is sold for less than the outstanding balance of the mortgage. The unpaid balance (known as the deficiency) may or may not still be owed by the borrower.

This option typically takes some time, as a few different lending institutions may own the mortgage. All parties who have a stake in the property must agree to the terms of the sale, and a potential deal could fall through if even one lender doesn’t agree.

Short Sale vs Foreclosure – Your Options

While both options can have ramifications, a short sale often has less of an impact on the borrower’s creditworthiness. A foreclosure could impact a borrower’s credit score by 300 or more points, where a short sale may only dent the credit score by 100 points.

Borrowers who are foreclosed on are often ineligible to purchase another home for 5-7 years with a traditional mortgage, where under certain circumstances, a short sale borrower can purchase immediately.

As many Americans struggle with an economy that has yet to completely recover from the 2008 crash, folks are having a hard time making monthly mortgage payments. Choosing between being foreclosed and initiating a short sale (or a 3rd option…  selling your Westchester County house fast  )is an easy choice for a borrower having troubles paying their mortgage on time.

Sometimes, lenders are willing to work with borrowers to complete a short sale, to avoid the fees and time-consuming process of conducting a foreclosure.

Our suggestion is always this.

  1. Talk with your lender and discuss ways that they can work with you on your loan.f you find yourself struggling to make payments on your loan, it’s important to take action as soon as possible. One of the best steps you can take is to talk directly with your lender and explore the various options that may be available to you. By communicating with your lender, you can work together to find a solution that works for both parties.

    In some cases, lenders may be willing to modify the terms of your loan to help make your payments more manageable. For example, they may be willing to lower your interest rate, extend the length of your loan, or even temporarily pause your payments altogether. However, these options are typically only available if you reach out and ask for them.

    If you’re unsure of how to navigate these conversations with your lender, there are resources available to help you. Many financial institutions offer support services to help guide borrowers through the process of negotiating with their lender. These services can provide valuable insights and advice, and may even be able to advocate on your behalf.

    At our company, we offer a similar service to help connect borrowers with the resources they need to work with their lender. Our team can provide guidance and support throughout the loan modification process, helping you to navigate the complex world of finance with confidence. So if you’re struggling to make payments on your loan, don’t hesitate to reach out and explore your options. With the right help and support, you can find a solution that works for you and your lender   .… just reach out to us on our Contact page and we’ll discuss your situation.

  2. Attempt a short sale or other programs your lender may have.When you’re facing financial hardship, it can be difficult to know where to turn. Fortunately, many lenders offer programs and services designed to help borrowers who are struggling to make their payments. One such option is a short sale, which can allow you to sell your property for less than what you owe on your loan, potentially reducing or even eliminating your debt.

    A short sale can be a good option if you’re facing financial difficulties and need to sell your home quickly. By working with your lender, you may be able to negotiate a lower payoff amount, which can help you avoid foreclosure and reduce your overall debt burden. However, it’s important to note that short sales can have a negative impact on your credit score, so it’s important to carefully consider all of your options before making a decision.

    In addition to short sales, there are other programs and services that your lender may offer to help you get back on your feet. For example, they may offer loan modification programs that can create a new, more affordable monthly payment based on your current financial situation. These programs can be a great option if you’re struggling to make your payments and need a more sustainable solution.

    Other programs that your lender may offer include forbearance, which allows you to temporarily pause your payments while you get back on your feet, and forgiveness programs that can reduce or eliminate your debt altogether. These programs can be a great option if you’re facing significant financial hardship and need assistance to get back on track.

    Overall, if you’re struggling to make your loan payments, it’s important to explore all of the options available to you. By working with your lender and taking advantage of the programs and services they offer, you can find a solution that works for you and your unique financial situation.

  3. If the bank isn’t willing to work with you very much…When you’re facing financial difficulties and struggling to make your loan payments, it can be a stressful and overwhelming experience. If you’ve explored all of your options and your lender isn’t willing to work with you to find a solution that meets your needs, you may be left with few options. In some cases, selling your house may be the best course of action.

    Selling your house can be a difficult decision to make, but it can also be a great way to get out of debt and start fresh. If you’re considering selling your house, it’s important to work with a reputable and experienced real estate buyer service that can help guide you through the process and ensure that you get a fair price for your property.

    At RecoveRE Holdings, LLC, we specialize in helping homeowners who are facing financial difficulties and need to sell their house quickly. We understand that every situation is unique, and we work closely with our clients to develop customized solutions that meet their needs and help them achieve their financial goals.

    When you work with us, we’ll start by conducting a thorough analysis of your property and your financial situation. We’ll then work with you to develop a plan that meets your needs and helps you get the best possible outcome. Whether you need to sell your house quickly, or you’re looking for a longer-term solution, we have the expertise and resources to help you achieve your goals.

    Overall, if you’re struggling to make your loan payments and your lender isn’t willing to work with you, selling your house may be the best option. By working with a trusted and experienced real estate buyer service like RecoveRE Holdings, LLC, you can ensure that you get a fair price for your property and start on the path to financial stability and security.

    To sell your house fast for an all-cash offer. If you’re interested we can look at your situation and make you a fair offer on your house within 24 hours. Just fill out the form on our website over here >>

  4. Foreclosure. Last resort is to let the house fall into foreclosure. This is the worst possible scenario. It’ll harm your credit and you could still be left with money owed to the bank even after the foreclosure is finished.

By knowing your options, you may be able to dodge a significant impact on your credit score, allowing you to purchase a new home when your situation improves. A foreclosure on your credit report makes that possibility extremely difficult for 5-7 years, so if you have the opportunity, a short sale can be the better option.

Have a pending foreclosure?  We’d like to make you a fair all-cash offer on your house.

Give us a call anytime at (877)REI-MGMT or
fill out the form on this website today! >>

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