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Mortgages were hit the hardest by the global financial crisis, and many people now find themselves in a situation where their mortgages are higher than the actual value of their homes. If you find yourself in this group, there is hope, because a short sale can protect your wealth and give you a way to exit from the agreement. By working with a short sale realtor in Chicago, you can negotiate a short sale with the bank and still protect your credit record. Here are four essential reasons you should choose a short sale over a foreclosure: 1. You Won’t Lose Money With a short sale you can walk away from your financial responsibility when your property is worth less than what you have bonded it for. If your property is bonded for $400 000, for example, but it is only worth $300 000, a short sale enables you to walk away from the $100 000 difference. 2. Your Credit Score Will Benefit A short sale does not affect your credit score to the same extent as a foreclosure, particularly over the long term. The bank will not report a short sale to the credit authorities, but a foreclosure is likely to stay on record for at least 10 years, if not longer. If you are foreclosed the deficit you owe can put your other assets like vehicles and other properties at risk of being attached. Your credit score will have recovered from a short sale in less than two years, while bankruptcy and foreclosure will stick around for significantly longer. If you participate in a short sale, it will probably affect your credit score by 50 to 120 points, but the greatest impact actually comes from payments you miss on your mortgage, not the short sale directly. 3. A Short Sale Is Not Accessible Through Public Records Foreclosures appear on permanent public records and are accessible when someone does a background check on you, but a short sale will not. 4. You Can Still Get Money Out Of the Deal Even if you come up short on your home value and need to perform a short sale, some home owners may qualify for as much as $3000 back from the bank. This could be used towards your relocation expenses, fixing up your new home or anything else you need it for. It is considered a form of payback for cooperating in the short sale process and keeping the property in decent condition. For more information about a short sale realtor Chicago, please visit our website.
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