What is mortgage short sale?
Answer:Mortgage short sale is the process of satisfying a debt with less than the amount owed.
For example, if a borrower bought a house for $130,000 with $10,000 down payment but later defaulted with payments. Meanwhile, he owes $120,000 to the first lender with late fees and interest. The property has depreciated in value and costs now $110,000. An investor steps in and offers $110,000. The first lender agrees to take the bid outside foreclosure as there are significant costs related with it and there is no guarantee a higher offer will come in.
The first lender thus agrees to a short sale as satisfaction of the mortgage debt.
This is how a real estate short sale allows for borrowers to satisfy their debt with less than the outstanding balance and to avoid foreclosure. Even though a short sale will hurt the credit score, it is still preferred to foreclosure.
Final piece of advice: Monitor your credit report and score regularly, to ensure there are no inaccuracies or unauthorized activity. Your credit report and score are the two major methods that creditors and lenders use to make a credit decision about you. Higher scores usually mean lower interest rates, which will save you money.
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Common misspellings: mortage and morgage