Homeowners that have seen their home’s value drop to a much lower price than they owe on their mortgage, which puts their mortgage underwater, are looking for ways to simply get out of their mortgage obligation. While many homeowners are just walking away, caring little for their credit score, others are looking to short sell their home.
A short sale has been said to be more advantageous for mortgage lenders than a foreclosure and with various programs available from top lenders to help homeowners short sell and governmental incentives for lenders to make short sales, underwater homeowners may have more options.
Many lenders are working with homeowners to short sell their home and many short sales are allowing homeowners to walk away from a frustrating situation without taking irreparable damage to their credit score.
A word of caution coming from analysts, though, is for homeowners to be sure they discuss principal forgiveness if they agree to short sale the house. However, there have been many homeowners that have worked with banks and, thanks to governmental incentives, have sold their home and been free from their underwater mortgage.
These programs differ from lender to lender, so any homeowner looking to short sale should talk with their mortgage lender to see what options are available for underwater homeowners looking to short sale.