If you’re struggling to make your monthly payments, you may be looking for just about any solution possible to try and get out from some of it. Arguably your largest debt is your home, but getting out of your mortgage may not be so easy, especially if you’re “upside down” or “under water” on your home (when the value of your home falls below the amount you owe on the mortgage).
There’s a solution to this problem that you may be able to take advantage of that can help you get out of this debt and on with your life: the short sale. A short-sale is an agreement between a lender and borrower whereby the lender agrees to accept less than the total amount owed on a mortgage in exchange for absolving the borrower of their debt and stopping the foreclosure process. While this certainly doesn’t sound like something any homeowner ever wants to endure, there are some benefits you could receive from doing so. Here are five of these benefits.
Save Your Credit Score
If you’ve been struggling with paying your bills, have missed payments, or are behind by a month or more, your credit score has probably taken a pretty good hit in recent months. Getting out of your largest debt can help you catch up on balances you’re behind on, which can help stop the damage to your score and even help you start rebuilding it. Getting a short sale can not only help you save your score, but strengthen it again, allowing you to get a new, more affordable mortgage later on when you’re ready to buy a new home.
Get Out of Your Largest Debt
Your mortgage is your largest monthly payment, and often times people would love to be able to repurpose that money in order to pay off other debts and get back on their feet faster. A short sale lets you do just that. After completing a short sale, many people can pay off credit card and student loan balances, complete the payments on their car, and much more. This way, when they’re ready to buy a home again, they have far fewer financial obligations to inhibit them.
Avoid Bankruptcy
Bankruptcy should always be considered a “last resort” when you’re in financial trouble, and going through a short sale can prevent you from ever having to consider it as an option. When you get out of your mortgage through a short sale, you don’t have to worry about the immense credit damage you would sustain from bankruptcy, and you won’t have to worry about potentially losing your home without remuneration if you can’t fully exempt it from the bankruptcy process.
Reduce Your Monthly Bills… A Lot
When you’re struggling with debt, having an extra thousand dollars or more per month to pay down some of your outstanding balances can do wonders. When you no longer have a mortgage payment to worry about, you’ll be able to reduce those monthly bills by quite a bit fairly quickly. This should give you the wiggle room you’ve needed to pay down your debts and pull yourself out of the financial hole.
Recover Your Financial Standing Faster
When you declare bankruptcy, you face at least seven years of having that declaration on your financial record, which means you could struggle to get a loan of any kind without having to pay insurance or an extremely high interest rate. However, if you use the benefits of a short sale to your advantage, you can start rebuilding your credit quickly, avoid having a bankruptcy on your record, and start getting back to an excellent standing far faster than you would have thought possible.
If you’re considering undergoing a short sale, you’ll want a Chicago consumer attorney on your side who can ensure your rights are maintained and preserved throughout the process. Call Atlas Consumer Law now at (312) 313-1613 to request a case evaluation and learn more about undertaking a short sale.