WHAT IS A SHORT SALE?
A short sale is when a lender accepts an offer for less than the total amount owed on a mortgage. The new purchase price is considered as paid in full.
Why do a short sale?
If a person cannot catch up on mortgage payments, owes more than the house is worth, or cannot negotiate terms with the bank, a short sale is a great way to decrease the amount of damage to your credit score.
What are the disadvantages of doing a short sale?
The disadvantage of short sales can be about 100-150 points taken off of your credit score. However, if you let it go to foreclosure your credit will be at the bottom and it will take many years to purchase another home. Also, if you do a short sale you cannot expect to walk away with any equity.
What is a "Subject to" purchase?
A 'subject to' purchase is a home purchased under the condition that the new owner will buy 'subject to' the existing financing. Subject to is different than an assumable loan. Most loans aren't assumable. However, with good communication with the bank you may be able to sell your home subject to the existing financing.
