The phone rings a desperate voice asking me what should I do? Should I make my mortgage payment or should I stop making my mortgage payment?This is one of the most toughest question a client or a consumer can ask me and this question comes up every time when talking on the phone, emails or at a listing presentation.
There are quite a few myths floating around with regards to making mortgage payments when considering doing a short sale. One of them is that you do not need to be in default with your lender in order to do a short sale.
While I am not a lawyer and can’t give you legal advice, I am well versed in Short Sales and this question when asked should be answered by a real estate attorney who specializes in foreclosures and short sales.
Reasons to take into account on whether or not to continue making mortgage payments should you consider a short sale
You may not have a choice because of your financial hardship where you have to put the monthly mortgage payment towards food and utilities.
You may save the monthly mortgage payment for moving expenses.
While it is not required to be behind on the mortgage, lenders may act upon to approve a short sale quicker than if you are current on your mortgage payment.
You may stand a better chance in getting the deficiency waived by your lender due to financial hardship. Why would a lender spend their resources chasing an empty wallet?
Your credit score will definitely have a major impact whether or not you do a short sale or your home will be foreclosed on. While a foreclosure has generally the most detrimental impact on your credit score usually 200-300 points a short sale on the other hand drops generally 100-200 points depending on your credit history.
You will not be able to receive a Fannie Mae backed loan for two years now to purchase another home while doing a short sale.
Making your monthly mortgage payment during a short sale
Afford to continue with your mortgage payment during a short sale will able you to protect your credit to some extent while doing a short sale and therefore allowing you to get FHA loan if you were not late on any of your mortgage payments. Less negative impact on your credit is the most important reason to continue making your mortgage payments.
Lender guidelines constantly changing and getting approved for a new mortgage is much easier when no mortgage late payments on your credit report were reported.
Since short sales require lender approval and there is never a guarantee, your credit is not affected should your lender rejects the short sale or you decide to cancel the short sale because your situation has improved. No foreclosure if your home does not sell because you stayed current on your mortgage.
Short Sale an emotional roller coaster. Whether you decide to continue with your mortgage payments or not, make no mistake, the whole short sale process is an emotional roller coaster, your option may be far better than letting the home go into foreclosure.
For a more detailed understanding of the process when buying or selling please visit Lakeland Short Sale.
Do you need to sell your home as a short sale in Lakeland, Auburndale, Bartow, Winter Haven, Polk City, Highland City, Mulberry or Bartow? Call or email me for a personal and confidential consultation.