Foreclosure Advice: Do Short Sales Still Make Sense? Here’s How to Tell If It’s Right for You

Editor Note: Utah’s home prices have been rebounding. So, we’re going to use this state as an example in our discussion here to determine if it’s worth it to short sale your home in today’s real estate market.

Should You Do a Short Sale? Some Factors to Consider

As the Utah real estate market continues its impressive rise in property values, homeowners considering seeking help with a short sale or a strategic default should make a decision sooner than later. Let’s consider the following:

Since the first quarter of 2012, home prices for single family homes in Salt Lake and Utah Counties have increased from an average sales price of $223,000 to $251,000, or an increase of 11%.

For 2013, a similar performance is expected with another 10% to 12% jump, putting the average selling price at $285,000. Part of the reason for this run up in value is the limited amount of inventory on the market. Couple that with interest rates still historically low, and it is no wonder that buyers and investors are rushing back and driving up prices.

What does all this mean for homeowners who are struggling to hold on to their homes?

For homeowners who are currently less than 10% underwater in their homes, there is the strong possibility they will recapture that lost equity by the end of the year. As such, they should be able to sell their home and walk away from it without having to do a Utah short sale. Of course, to avoid taking a hit to their credit, they will need to keep up on their mortgage payments to avoid going into default.

Those considering a strategic default, the risk of being denied a short sale approval and having their credit negatively impacted is too great. Better to keep the home long enough to allow values to come back before selling.

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Homeowners who are more than 10% upside down in their homes and cannot afford their mortgage payments, finding short sale help still makes good sense.

The reason is, the likelihood of the market appreciating enough by the end of 2013 help these homeowners is slim; and with the Mortgage Forgiveness Debt Relief Act and the incentive programs still available from many mortgage servicers, now is the time to short sell a home, walk away from the mortgage debt, avoid paying taxes on that forgiven debt and receive compensation from their bank to help them move.

Two important factors for those individuals considering keeping or selling their home are to carefully evaluate their financial position and to find out the value of their home.

If you can afford your mortgage payment and your negative equity position is less than 10%, consider holding on to your home. In a year, you should be able to sell and walk away. You may even be able to sell and make a little money. If, however, you cannot afford your mortgage payments (regardless of how much negative equity your home carries), short selling is still your best bet.

Yes, short sales do come with consequences, namely the impact to your credit and the inability to purchase a new home with conventional or government-backed financing for several years. The upside is that you will have shed the negative mortgage debt and will be in a much better financial position to buy again once the mandatory two to three year waiting period to purchase has expired.

Related Posts

Short Sale Tax Implications: What Sellers Need to Know

The Short Sale Process: How to Find a Short Sale Buyer for Your “About to Be Foreclosed On” Home

What Is the Bank Short Sale Process for Sellers?

Short Sale: Definition, Credit Implications, Tax Implications & More

Stop Foreclosure: How to Ready Your Home for a Fast (Short) Sale

2 Foreclosure Options for Homeowners with Little or No Equity in Their Homes

What the Foreclosure Settlement & More Short Sales Mean for Homeowners Facing Foreclosure

Mortgage Foreclosure Timeline: How the Foreclosure Process Works & How Long You Actually Have to Move if You Eventually Lose Your Home

Right of Redemption Laws: How to Get Your Home Back – Even After It’s Sold as a Foreclosure

The Timeline For Foreclosure In All 50 States

P.S.: Foreclosure Clean Up Job Leads: FYI, don’t forget to bookmark the site and come back for direct leads on foreclosure cleaning jobs, foreclosure cleaning contracts and foreclosure cleanup request for bids on jobs. Always look under the “Recent Posts” heading to find the latest job listings.

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About the Author: As the founder of foreclosure prevention | UTAH, Brian Tripoli has dedicated his expertise to helping homeowners find relief to their mortgage-related struggles. Contact me for a market analysis of your home to help you determine if it makes better sense to keep your home or to sell your home. If you would like a confidential consultation of your financial situation, contact Brian at http://www.foreclosurepreventionutah.com/get-help-now or visit http://www.foreclosurepreventionutah.com to learn more about your options to foreclosure.

Copyright © 2013 Yuwanda Black for Foreclosure Business News. Legal Disclaimer: The information dispensed on this blog is not to be taken as legal advice; it is for general purposes only. Please consult a qualified professional (eg, attorney, accountant, real estate agent, etc.) — in your jurisdiction — before taking any action based on the information listed here.

Foreclosure Advice: Did You Know That How Much You Save Affects Whether You Will Be Foreclosed On?

Many who are facing foreclosure and/or have lost their home to foreclosure did so because of a loss of income. Proof?

According to a report from Treasury, 68.1 percent of homeowners who received a loan modification said loss of income (curtailment of income or unemployment) was the main hardship they faced. In addition, the survey found 72 percent of those who make more than $75,000 had at least three months of savings compared to 35 percent for those making less. [Source: Survey: 27% of Americans Have No Emergency Savings]

So, one could surmise that how much you save directly impacts whether or not you will survive a foreclosure or not.

If you’ve already lost your home to foreclosure, are facing foreclosure and/or are rebuilding your credit after a foreclosure, following are some healthy financial habits to get into — especially as it relates to housing.

How to Rebuild Credit After a Foreclosure & Other Healthy Money Habits You Should Invest In

1) Save 6 to 8 months of expenses: Some experts will even advise building up an emergency fund that can carry you through a whole year. The reason is, it’s taking longer to find a job after you lose one. And, many who do find jobs find themselves underemployed (ie, earning less). So, the more you have saved, the better your chance of surviving a job loss, illness or other type of emergency.

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2) Revamp Lifestyle: There’s nothing like losing the very roof over your head — or the threat of it — to make you assess what’s really important in life, ie, can you really afford a $500 per month car payment; eat out to the tune of $400 per month; get weekly mani/pedi’s; buy the latest tech gadget?

Many of us live way beyond our means — and don’t even realize it. Proof? Watch “money shows” like Til Debt Do Us Part. I’m constantly amazed at how many of the couples featured on this show have no clue as to not only how much they’re overspending each month; but many don’t even realize exactly how much they earn.

This brings me to my next tip which is to . . .

3) Get in Touch with Your Money: As in, KNOW — to the penny — how much you earn each month. This will not only tell you how much you can afford (or not afford) to spend, but to respect your money. Much like dating, if you want to get to have a relationship with someone, you have to get to know them. And to do that, what do you do — ask basic questions; learn who they are and what they’re all about.

Same thing with money — you need to get it touch with it and learn about it in order to develop a healthy relationship with it. This means knowing BASICS like how much you earn, what you spend it on, what you want/need it to accomplish for you, what it means to you, etc.

4) Learn How to Use Money Smartly: If you’ve been taught (or witnessed) unhealthy money habits growing up, it’s up to you as an adult to change this. So, invest in classes; speak with money experts, talk with friends who have good relationships with money — in short, do whatever you need to to turn things around.

As alluded to above, you have a RELATIONSHIP with money whether you acknowledge it or not. Make sure it’s a healthy one — one that brings you prosperity and happiness; not stress and unhappiness.

5) Make Saving a Habit: How much you save will depend on many factors, eg, your earnings, but many experts will advise you to save at least 10%. The point is to get in the habit of saving SOMETHING out of everything you earn. And if you start saving early (eg, in your 20s) and invest your money wisely (eg, in a well-researched mutual fund), it practically won’t matter if you ever earn “a lot” of money in your lifetime, because compound interest will ensure that you’ll be okay in your old age.

How to Save One Million Dollars

Sound impossible?

It’s not. Proof?

. . .  as Einstein reportedly put it, compound interest is the “eighth wonder of the world.” . . . Becoming a millionaire depends on how much money you currently have saved, how much interest that money will earn, how much you can save each month — and, of course, how long you can wait before making a withdrawal.

You see, becoming rich is not about how much you earn, it’s about how much you save. And, as the first link in this post underscores, those who earn more seem to figure it out much earlier than those who earn less. . . . which means there’s no better reason to do as the rich do when it comes to money, no?

Related Posts

Foreclosure & Credit: How Does a Foreclosure Impact Your Credit Report?

Home Loan, Bad Credit and How to Qualify: Yes, It’s Still Possible, But . . .

Foreclosure Advice & Credit Card Debt: Can Credit Card Companies Put a Lien On Your Home?

Home Foreclosure: The New Credit Standards to Qualify for a Mortgage Brought on by the Crisis

Foreclosure Laws: Divorce, Debt & Foreclosure – What Every Dependent Spouse Needs to Know

Foreclosure Consequences: Exploring “Voluntary Foreclosure” 

Cash for Keys Program: If You’re in Foreclosure and Have Filed Bankruptcy What You Need to Know

Underwater On Your Home? Filing Chapter 7 Bankruptcy? Should You Reaffirm Your Mortgage?

P.S.: Foreclosure Clean Up Job Leads: FYI, don’t forget to bookmark the site and come back for direct leads on foreclosure cleaning jobs, foreclosure cleaning contracts and foreclosure cleanup request for bids on jobs. Always look under the “Recent Posts” heading to find the latest job listings.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2013 Yuwanda Black for Foreclosure Business News. Legal Disclaimer: The information dispensed on this blog is not to be taken as legal advice; it is for general purposes only. Please consult a qualified professional (eg, attorney, accountant, real estate agent, etc.)  — in your jurisdiction — before taking any action based on the information listed here.

Can You Get a Permanent Home Loan Modification? Over 6 Million Homeowners Have Since 2007

Nearly 70,000 homeowners received permanent loan modifications in April, while foreclosure sales stood at 59,000 for the month, according to data from HOPE NOW, an alliance of mortgage servicers, investors, mortgage insurers, and nonprofit counselors.

Of the 70,000 modifications, about 58,000 were proprietary, or private, loan modifications, while about 12,000 were through the government’s Home Affordable Modification Program (HAMP), HOPE NOW reported. In March, servicers provided over 88,000 modifications for homeowners.

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There are plenty of foreclosure cleanup (and RE-related) jobs out there. Get your foreclosure cleaning “Business in a Box” and start this lucrative business right now for 40% Off!

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Since 2007, a total of 6.39 million homeowners have received permanent modifications.

Read this full post containing the latest foreclosure news.

Related Posts

Foreclosure Notice: How to Understand It & What to Do When You Receive One

Foreclosure Advice: Should You Continue to Pay Your Mortgage While You Wait for a Home Loan Modification?

How to Stop Home Foreclosure For Over 2 Years Without Making Payments: Do it Yourself for Free — Here’s How

Stopping Foreclosure: What to Do When the Bank Refuses to Accept Your Mortgage Payments & Tries to Escalate the Home Foreclosure Process

Do I Still Have to Pay Taxes After a Foreclosure? The Answer Might Surprise You

Understanding Foreclosure Deficiencies and Mortgage Debt Forgiveness: Specific, Clear, Detailed Examples Given

I Received a 1099 From My Home Equity Lender: Tax Consequences of Foreclosure — with a HELOC

“Cash for Keys” Can Help if You Have a House in Foreclosure & Can’t Afford to Move 

Get Foreclosure Help: How to Find Agencies that Will Help You Stop Foreclosure – For Free

How to Stop Foreclosure Using Chapter 13 Bankruptcy: What to Expect When You File, How Ch 13 Differs from Ch 7 & More

Cash for Keys: How Not to Lose This Money if You’re in Foreclosure and File Chapter 7 Bankruptcy

Stopping Foreclosure: What the “Produce the Note” Defense Is & How It Can Help You Save Your Home from Foreclosure (Or at Least Stall)

P.S.: Foreclosure Clean Up Job Leads: FYI, don’t forget to bookmark the site and come back for direct leads on foreclosure cleaning jobs, foreclosure cleaning contracts and foreclosure cleanup request for bids on jobs. Always look under the “Recent Posts” heading to find the latest job listings.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2013 Yuwanda Black for Foreclosure Business News. Legal Disclaimer: The information dispensed on this blog is not to be taken as legal advice; it is for general purposes only. Please consult a qualified professional (eg, attorney, accountant, real estate agent, etc.)  — in your jurisdiction — before taking any action based on the information listed here.