While Denver Short Sales and Foreclosure has not been a big thing in the last 12-14 years they do still happen. The problem is that they have not been common so when one does need to happen, a lot of realtors have no idea how to go about it. I have a personal story about losing a home, one that I would love to prevent others from happening to them. Due to that I also have a certification in Denver short sales and foreclosure. First, let’s relive my experience at losing our home back in 2012.
My Personal Foreclosure Story
I married my husband and moved to the USA in 2004. In 2007 we had a massive year, we got a rescue dog, had a baby and bought a house all in the same year. We were also broke and shouldn’t have done these things, especially the buying of a home. I will never regret having my son or having our dog. But the house, the house we could have held off on.
We bought a flipped home. It looked lipsticky on the outside but after moving in we found many issues and we had no money.
We also bought the home in 2007 with a 80/20 loan. This means we had no money whatsoever in the house. These loans were allowed back then but after the crash they did limit them. However, I have seen loans pretty close to nothing down come back throughout the years. Most loans though you will need to have at least 3 – 3.5 % to put down (You can get this money from down payment assistance programs).
So lets recap, lots of changes, no money, a full mortgage with no money invested and a home that needed fixes.
It All Falls Apart
Then….. the real estate crash came. Our home value flipped upside down and we could no longer afford to hold onto the home.
We were clueless as you can see. So I had no idea about short sales, I wasn’t a realtor back then and the realtor we had was hopeless. Illinois where our home was located was a no recourse state so we walked away from our home.
We had put money into that home, we had paid the mortgage for 5 years, we had built memories and we just walked away from it all. We made a settlement with the 20 part of the loan and paid that out and the rest we took a hit on our credit score for. We could also not buy a home for many more years after that. I also remember waiting for the knock on the door once we moved from collections which was not fun. I do not recommend.
How You Can Learn From My Personal Story
If you learn anything it is that you have options. There are options before you start missing payments, there are options if you miss one or 2 payments, but leave it more then that and you may end up in foreclosure. Is foreclosure the best option? Sometimes it is but most of the time you can use a sale or short sale to stop the spiral into foreclosure. A short sale will not hit your credit as hard and may help you hang on to any cash you can save during this time.
Talk to a professional first before making any decisions. Talk to a professional first before missing a payment. Find out if you have any equity in your home that will save you from a short sale. Find out if there is a way to sell or even save your home first.
Why You Might Need a Short Sale
For so many that bought prior to the beginning of 2022 you will have equity in your home. Equity can help you save your home from a short sale or foreclosure, you may be able to stay in your home if you hit rough patches. If you do need to sell, equity can help you pay the cost of selling your home and possibly let you walk away with money.
So first step if you are hitting hard times is to find out if/how much equity you have in your home,
But what if you purchased late 2022 to now and you can’t pay your mortgage now. What if you don’t have any equity?
If you have fallen into hard times and you can’t afford to make payments on your home you may need to look at options. One thing you need to know is that YOU HAVE TO PROVE YOUR FINANCIAL HARDSHIP to be eligible for a short sale or foreclosure. So lets look at what is classified as financial hardship.
- Divorce or Separation
- Job Loss
- Death of a Spouse
- Medical Expenses
- Natural Disaster
- Incarceration
- Job Transfers Where You Can’t Keep Your Home
These are just a general example of things that may qualify as hardship. This is the second thing to look at after working out your equity situation. Without a hardship your mortgage company or bank won’t allow you qualify for the short sale.
Why Short Sale Before You Get to Foreclosure
Here are reasons why selling your home by short sale can be better then getting to the foreclosure stage.
- You the seller avoid foreclosure. You can be released from some or all of the mortgage obligation with the lender.
- You can get financed on another home faster after a short sale than foreclosure.
- Your credit rating recovers faster.
- You can stay in the home until the short sale is finalized.
- Sometimes relocation expenses are offered as part of the lender’s closing package.
- Closing costs and broker’s fees may be paid by the lender.
- Lenders prefer short sales as it save them money and they won’t need to sell the home themselves.
Can You No Longer Make Your Denver Home Mortgage Payments?
If you are at the stage where you can’t make your Denver Home Mortgage Payments I would like to help. As you can see by this blog I come from a place of having been through this. I come from a place of making maybe not the right decision. I come from a place of not getting the right advice.
I want to help you make the best choice for you. We will go over you homes value, your equity and then short sale process if necessary.
I am certified as a Short Sale and Foreclosure Resource Agent (SFR) through the National Association of Realtors. I am here to help.
Contact me at info@haleybartlett.com and let’s start the conversation to help you make the best choice here. I am your ally in this and here to help.
