What you should know about short sales in Illinois

You do have options when facing a foreclosure Illinois, including putting your home up for a short sale. At Ledford, Wu & Borges, LLC, we understand the pros and cons of taking this step and help advise clients of the option that is best for their situation.

According to Realtor.com, in order to turn a short sale, you will need to get your lender to agree to take less money than is owed on the home. In many cases, this will mean that your debt is considered paid in full. However, some lenders may still hold you accountable for the difference and initiate collections proceedings. Reading the fine print of any short sale agreement will ensure you know exactly what the lender expects of you.

One of the key reasons people choose to do a short sale is because it avoids foreclosure, which can have a devastating effect on your credit report. Experts estimate that a foreclosure can take 100 points or more off your credit. A short sale will still have a negative effect on your credit rating, but it does not necessarily carry as much weight as a foreclosure does.

A foreclosure often means that you are not permitted to buy another home for a set period of time. For example, FHA loans require that you wait a year after a foreclosure before you can obtain a new loan. However, the waiting time after a short sale may be shorter or even nonexistent.

There are advantages and disadvantages of embarking on a short sale, though you may want to try other alternatives to foreclosure first. For example, you could try to refinance your mortgage or modify your loan. You can also speak to an attorney, who can take a look at your finances and help you determine which path may be best. For more information on this topic, please visit our page on what to do when facing foreclosure.

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