Should we foreclose?

Question

We are in a really tight situation right now, can't pull the house, loosing my job. The house is worth less than what I owe on it. Witch is not surprising now days. If I try selling it, it will take forever and as I said, I can't pull payments for the time it will be on the market. What are the downfalls of foreclosing, i know it will kill my credit, but i have noooooo other choice. What is short sale, and should i consider it?

Answer 1

You should immediately contact your bank/mortgage holder and discuss your situation.  They may very well be willing to accept a short sale.  This is where they allow you to sell the house for less than you owe and get the proceeds and cancel your debt in full.  This could allow you to shorten the typical listing/sale period and get out from under the debt and salvage your credit rating.

Answer 2

Sounds like your present circumstances are going to dictate your future.  Its ok.  There is life after foreclosure and its not like you will never be able to buy a house again.  Most lenders will consider you for a mortgage loan 2 to 4 years after foreslosure.  Now don't expect to get the best rates and expect to need a good size down payment but its very possible.  Remember that there are other ways to buy homes.  Many seller's are willing to get very creative these days.  For instance, a wrap-around mortgage may work or a lease to own scenario may be best.  You'd be surprised how many opportunities there are out there for people in your situation.    

A short sale is possible and in many cases will allow you to stay in the house a while longer while the process works itself out.  You should consult a good real estate agent that has experience with short sales in your area.

Good luck.