Many homeowners with an underwater mortgage are looking for solutions for a bad situation. Owing more on mortgage than a home is worth is a frustrating position and while many people have sought out refinancing options to make their underwater mortgage more affordable or have been asking for principal reductions so that their underwater mortgage will not cause the loss of profit if they choose to sell in the future, there are homeowners who are using short sales to get out of an underwater mortgage situation.
Homeowners that feel they are in a losing situation when it comes to their underwater mortgage are working with their banks, and in some cases second mortgage holders, in order to short sell their home. Obviously, selling a home at a loss is not ideal, but many homeowners simply want to be rid of their home when it has lost a substantial amount of value.
Also, homeowners that short sale, with the agreement of their lender, may stand to get some of their moving costs covered, according to the Treasury Department. These incentives to short sell an underwater mortgage could be beneficial as homeowners would no longer owe more on the home than it’s worth and lenders would be able to resell the home and not have to worry about the homeowner simply walking away or the need to proceed with foreclosure.
Any homeowner that may be considering a short sale should contact their lender and discuss options, the process, and what all will be needed in order to begin the short sale process. Before proceeding with a short sale homeowners need to talk with their lender and look at their current financial situation to make sure that short selling their home is going to be in their best interest.