There's no simple answer. You often hear that the culprits are Adjustable Rate Mortgages and sub-prime loans, but they aren't the only reasons why the market is currently flooded with short sales.
Many homeowners are upside down on their mortgage due to the drastic decrease in home values over the last few years, but that only becomes an issue if they can no longer afford to keep their property.
Here are some common reasons for short sales:
- Loss of income due to layoffs, illness, divorce, retirement, etc. and inability to meet obligations and cover expenses of home ownership
- Catastrophic event such as accident, death of family member, illness, etc, with new debt that strains the budget and doesn't leave enough to cover the mortgage
- Work-related transfer to another city or state and insufficient income to maintain two household
- Investment property, that due to decreased rental prices, no longer generates enough income to pay mortgage and expenses
Any of these circumstances can result in the inability to meet mortgage obligations and can leave a homeowner with formerly excellent credit in a seemingly impossible situation.
Real estate is a long-term investment and homeowners who can hold on for 5-10 years will likely find themselves in a solid position again. Those who need to sell their homes now should probably try for a short sale.
Please contact me if you are considering a short sale in the Tallahassee or surrounding areas and would like assistance.
Comments(0)