Selling your home can be a complicated process especially if you’re selling your because you can no longer afford to live there. There are many people who don’t even realize they have options and will start to panic and not make the best decisions when their finances become very strapped. It’s important to remember there are options out there to help you get out from under your mortgage so that you can live more comfortably. One of these options is shortselling your home before it gets foreclosed on. If you are considering listing a shortsale in Georgia there are some questions you will want to have answered. The more you know the better chance you have of walking away in the best standing.
What Exactly Is A Shortsale?
A shortsale is the process in which a lender and the borrower work together to find a price to list the home at that is generally lower than what the borrower owes on the home. The lender then forgives the difference so that the borrower can walk away from the home without a foreclosure on their report.
What Consequences Will You Have With Taxes And A Shortsale
You will be taxed on the difference between what you owe and the actual selling price of the home. You will also want to do your homework on the Mortgage Forgiveness Debt Relief Act of 2007. This actually terminates the tax on as much as two million dollars for most sales that are foreclosures and shortsales.
How Does A Shortsale Affect Your Credit
A lot of people think that selling their home on a shortsale will not affect their credit. This isn’t true, it is however true that selling your home this way will affect your credit far less than when it’s foreclosed on. Generally speaking, a shortsale will affect your FICO by lowering the score between 50 and 150 whereas a foreclosure will drop it between 210-420 points.
What Are The Advantages And Disadvantages Of Listing A Shortsale In Georgia
It’s important to have a full understanding of what advantages and disadvantages you might expect when listing your home as a shortsale. First consider all the advantages of listing as a shortsale in Georgia.
Advantages:
- You still have quite a bit of control over what is going on.
- You won’t have to pay mortgage payments during the process.
- You won’t have the bad mark of a foreclosure on your credit report.
- You don’t have to fall behind on your mortgage to do a short sale.
- You may end up with lower living expenses.
- You can get it on the market quickly.
Disadvantages:
- A shortsale with multiple lenders on your mortgage can make it very difficult.
- You will be expected to move as soon as the home closes.
- The process can take one month but will likely be quite a bit longer.
- If you borrowed against the home and used it for something other than home expenses there may be tax consequences.
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