Poway Community Blog

With the country feel that living in Poway exudes, there is no surprise that homeowners find it difficult to move even if a need arises. With the current situation the real estate market is in, some Poway homes for sale have been valued lower than its mortgage amount and some homeowners have also had difficulty coming up with funds for the monthly payments. Naturally, no homeowner in this situation will want to continue paying for a mortgage that's way above the value of the house. Instead, the homeowner will look for options that will end the mortgage and free him/her of any obligation. 

Short selling is one of the options available to owners of Poway homes for sale that are underwater and this option involves selling the home at its current value. 'Short' is the deficiency that happens after the house has been sold. There are pros and cons involved in this particular option so here are factors to consider before short selling:

Affordability

Can you still afford to pay the mortgage monthly payments? Another option available is loan modification but when you don't see an increase in income, short selling might be a better option for you. The bottom line is that if you can no longer afford to meet payments, short sell rather than put an inevitable foreclosure at bay.

Deficiency

Compared to just walking away and allowing the lender enforce a foreclosure, short selling might save your from a deficiency claim. Most lenders who find good reason such as a hardship situation will waive the short on the sale. Under the government backed HAFA program, second liens or mortgage lenders are paid a minimum amount to cover a part of the loss as well.

Credit Score

As opposed to a strategic mortgage default, a short sale will allow you to be eligible for a new mortgage in just a short time. A short sale will generally affect your credit score but not as much when a foreclosure is imposed. Certain lenders like Fannie Mae have also imposed a 7-year lockout to homeowners who fail to make arrangements with their lenders.

For an owner of Poway homes for sale, short selling is one of the options available, especially if they are underwater and having issues paying the mortgages. Carefully considering the pros and cons is a must before the owner asks the lender for a short sale option.