Trying to figure out how to buy or sell a house in Columbus? One must know the Difference Between Short Sale and Foreclosure in Columbus. Both choices are available to homeowners who are having trouble paying their bills, but the way they work and what they mean is very different. On this road, these differences can be very important to know. This article will walk you through Between Short Sale And Foreclosure In Columbus.
What Is A Foreclosure In Columbus Ohio?
In the world of real estate, the word “foreclosure” has a lot of weight. It’s a process that homeowners never want to go through, especially in places like Columbus, Ohio, that are full of life. But what does it really mean to go into debt in this Midwestern city?
When homeowners fail to meet their mortgage obligations, the specter of foreclosure looms. In essence, foreclosure is the legal procedure that lenders use when they want to reclaim a property as a result of a homeowner’s persistent missed payments. The repercussions can be severe, not only in the erosion of one’s credit standing but also in the potential loss of the home itself.
Yet, it’s imperative to draw a distinction, especially when we ponder The Difference Between Short Sale And Foreclosure In Columbus. A short sale arises prior to any foreclosure action, offering an alternative route for distressed homeowners. This strategy involves selling the property for an amount that may be less than the mortgage balance, potentially averting the stigmatizing label of foreclosure.
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 the world of real estate, a short sale is a term many might come across when exploring financial solutions for homeownership challenges. At its essence, a short sale is when a property is sold for a price that is less than the remaining amount owed on the mortgage. For homeowners grappling with financial strains, a short sale can be a potential path to consider, especially if keeping up with mortgage payments becomes untenable.
However, it’s not as simple as just deciding to sell. The bank or lending institution holding the mortgage must give its approval for a short sale to proceed. This often requires careful negotiation and documentation to showcase the homeowner’s financial hardships.
But why consider a short sale? The Difference Between Short Sale And Foreclosure in Columbus is the manner and implications of each. In essence, a short sale is a proactive action that the homeowner and lender take together. On the other hand, foreclosure is a step that the lender initiates to take back the property after a string of missed payments, making it more passive from the homeowner’s perspective.
In conclusion, while both short sales and foreclosures come with their own sets of challenges and consequences, understanding the intricacies of a short sale can provide homeowners with another avenue to navigate difficult financial terrain.
Short Sale vs Foreclosure – Your Options
Both methods may have consequences, although a short sale frequently has a less significant effect on the borrower’s rating. A short sale may only lower a borrower’s credit score by 100 points, whereas a foreclosure may lower it by 300 points or more.
When a borrower is subject to foreclosure, they frequently lose their ability to obtain a standard mortgage for 5-7 years. However, in some cases, a borrower who is the subject of a short sale may be able to acquire a home right away.
People are finding it difficult to make their monthly mortgage payments as many Americans struggle with an economy that is still recovering from the 2008 recession. For a borrower having problems making their mortgage payments on time, choosing between going into foreclosure and starting a short sale (or a third alternative… selling your Columbus house fast) is a simple decision.
In order to avoid the costs and time-consuming process of initiating a foreclosure, lenders will occasionally cooperate with debtors to achieve a short sale.
Our suggestion is always this.
- Talk with your lender and discuss ways that they can work with you on your loan. We offer this service where we can help guide you in the right direction if you run into issues with your lender… just reach out to us on our Contact page and we’ll discuss your situation.
- Attempt a short sale or other programs your lender may have that forgives part of your loan, creates a new / more affordable monthly payment so you can get back on your feet, etc.
- If the bank isn’t willing to work with you very much, your best option may be to sell your house. Work with a local real estate house buyer service like Columbus Ohio House Buyers 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 >>
- Foreclosure. The 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.