Nobody enters into a mortgage assuming they are going to fall short on their payments; however, life happens and borrowers might need a way out. In serious situations, lenders may elect to foreclose on homeowners who are unable to make their mortgage payments. Fortunately, there might be another way out. This is called a short sale.
A short sale is when the mortgage lender(s) agrees to sell the property for a lower amount than the loan-balance remaining.
If you're looking to get an untraditional deal on a new home purchase, you may encounter either a short sale or a foreclosure. These two terms refer to sales that are not usual. As a homebuyer, it's important to understand the differences between them and how each one might affect your buying experience.
You just found your perfect home, and you feel like everything is right including the price. But, what could be wrong with your ideal home? Maybe, it is being sold as a short sale, and that could present a major challenge if you want to become be the eventual homeowner.
If you have been looking for a new home, and you find one offered under a short sale, this may be to your advantage. While some buyers are wary about buying a home that needs to be sold with the approval of the lender, it's a great way to get a bargain on a home that you love.
On the surface, a short sale seems like the perfect deal. However, before you take the plunge, you need to understand how this type of home purchase works.