What is a short sale?
A short sale is a sale in which a mortgage holder agrees to accept less than what is owed on the existing mortgage. For example, if you owe $500,000 on your mortgage, but the value of the house is $400,000, this leads to negative $100,000 in equity. If the lender agrees to selling the house for $400,000 this is a shortsale.
A short sale happens when a homeowner sells their house for less than what they owe on their mortgage, and the lender agrees to accept the lower amount.
Why it happens:
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The homeowner is usually in financial trouble.
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The house is worth less than the mortgage balance.
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It’s an alternative to foreclosure.
Another Example:
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Mortgage balance: $300,000
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House value: $250,000
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Lender agrees to the sale at $250K to avoid a longer, more expensive foreclosure process.
Confused about the negative equity? Don’t lose your house to foreclosure! We can guide you through the short sale process.
You May Be Asking…
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- Do I owe more than my mortgage?
- Do I want to save my credit?
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