Avoid Foreclosure and Protect Your Credit by Doing A Naperville Short Sale
What’s the difference between naperville short sales and foreclosure
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Transcript of What’s the difference between naperville short sales and foreclosure
What’s the Difference Between Naperville Short Sales and Foreclosure?
When a homeowner fails to make his or her mortgage payments or becomes delinquent in their
payments, the home is foreclosed upon. In a foreclosure, the lender assumes ownership of the home
and evicts the delinquent borrower. The lender initiates the sale of the home at a foreclosure auction or a trustee sale.
A short sale is used by distressed homeowners as an alternative to foreclosure. If a homeowner owes
more than the current market value of the home, a good option is to do a Naperville short sale. A short
sale is initiated by the homeowner, unlike a foreclosure where the home is sold by the lender. In a short
sale, the home is sold through a real estate agent specializing in short sales and is sold much like a
traditional sale, except short sales involve more paperwork and parties than a traditional real estate
transaction. As with any transaction, there are tax implications, please read the rules on www.irs.gov and speak with your lawyer before proceeding.
If the lender approves the short sale, the lender agrees to accept less than what is owed from the
proceeds of the sale. In most circumstances, the borrower can walk away debt free -- if the lender agrees to waive the difference of the loan balance and the proceeds from the short sale.
Benefits of a Naperville Short Sale Over a Foreclosure
Impact on Credit Score.
Short sales and foreclosures both have a negative impact on the borrower’s credit score. However, short
sales have a comparatively lesser impact on the credit score. A borrower’s credit score may drop from
50-150 points during a short sale and 200-400 points after foreclosure.
Waiting Period to Buy a New Home
Borrowers have to wait 7 years after foreclosure before they can buy a new property. In a short sale, the
borrower may be able to buy a new house at least a year after the short sale depending on the type of loan, the borrower’s eligibility and their unique situation.
Mention in Future Loan Applications
It is mandatory for a foreclosure to be reported in future loan applications, which could have a negative
impact to your loan application. A short sale does not necessarily have to be mentioned in future loan
applications, which is more beneficial to borrowers who plan on buying a new property after a short sale.
HAFA Eligibility
Homeowners who have gone through a short sale can still be eligible for the Home Affordable
Foreclosure Alternatives (HAFA) Program, while those who have gone through foreclosures are not eligible for the HAFA program.
Although a short sale and a foreclosure both have a negative impact on one’s credit score, a short sale is
still a better option than foreclosure. Short sales offer more advantages for distressed homeowners and
help them recover their financial standing faster. If you want to know about Naperville short sales, visit www.RyanHillCanHelp.com.
If you are ready to do a Naperville short sale call me, Teresa Ryan at 630-276-7575. As an owner/broker of Ryan Hill Realty, I have the experience and tools to help you sell your Naperville short sale home.