We all have rough times every now and again. If you’re reading this you may be considering going through with foreclosure or short sale. As a property owner in Charleston, having a rough time may mean losing your house. The biggest investment of your life. You may be facing foreclosure if you are unable to make your mortgage. This all depends on your mortgage document. So, which is better? Foreclosure or Short Sale?
Foreclosures Happen To The Best Of Us
The foreclosure process will not begin until you have missed between 3-6 payments. First of all, it is important to understand that foreclosure is a process. The first step is pre-foreclosure. This means that the property is in default and the bank may or may not foreclose on the property. The second step is a short sale. This is where the owner is trying to sell the property before the bank forecloses, but the market value is a little short of their balance due on the loan. Depending on the bank, they may or may not accept offers less than the balance due at this point. If the owner can get the bank to short sell, it is much better for their credit. The third step is the foreclosure auction. This is when the bank is trying to get the most money for the property in a short amount of time. The fourth step is an REO, which stands for “Real Estate Owned”. If the property does not sell at auction, the bank then repossesses the property and places it on the market for sale.
“Foreclosure” is the bank taking title or “possession” of your Charleston house. This would impact your credit score and would also show up in any reports that future landlords would run. The foreclosure stays on your credit for at least 7 years before falling off, sometimes 10 years. Depending on your situation, you may have more time to live in your home if you let it go to foreclosure because of the statutory redemption period. This time frame depends on whether you took title via mortgage or deed of trust. If you have a mortgage, then the process may take as quick as 30 days, or as long as 2 years. At the end of the redemption period, if you have not reinstated your loan and are still not able to make your payments, then you must move out. If you took title through a deed of trust, there is no statutory redemption period, and you have to move out immediately. If you’re wondering how to completely avoid foreclosure click here.