Strategic Default Foreclosure Or Short Sale – Which Is Better For You?

Austin Texas – If you are upside down and unable to make your house payment any longer, then you might be tempted to just walk away and let your home go to foreclosure and mail your keys to the lender. This is what about 70% of homeowners do in the U.S. that find themselves in that situation.

However, before you walk away and move out, I have some important information to tell you. You should stay in the house for as long as possible. Don’t move until you absolutely have to.

The national average length of time you can live for free in your home after you have stopped paying your mortgage is about 400 days. That number is of course a statistical national average. Your local number could be different.

Many lenders take around 4 to 12 months to just file the foreclosure on you. Then, the foreclosure process can last another 3 to 12 months on top of that, if not longer.

And then after the lender forecloses and they become the legal owner of your home it may take them another several months to notify you to move out (I'm not kidding).

And did you know when your lender finally gets around to asking you to move out after they foreclose on you, they are likely going to offer you some cash money for your cooperation and to move out.

Yes, this not a joke either, it is called “cash for keys” in the REO Foreclosure world. The cash for keys amounts I commonly see offered by lenders is $500 up to about $1,500 per property.

So here is the bottom line: DON’T MOVE OUT UNTIL IT IS REQUIRED by your lienholder.

Stay in the house and save the money you would be spending on rent to help you get back on your financial feet even faster.

So, what if you have decided to walk away, but you want to reduce the negative side effects of foreclosure i.e. Deficiency Judgements chasing you around for 7 to 10 years and negative effects on your credit and the like ?

You can avoid a lot of the bad side effects with a Short Sale. First off, on about 90%+ of all short sales, you won’t have to pay any money back you owe now. The debt is forgiven,

Second, you will be eligible to buy another house in 12 to 24 months (you will likely have to wait 4 to 8 years after a foreclosure.) Third, a short sale costs you nothing out of pocket.

When the home short sells, your lender pays all your closing costs and back taxes too. The lenders know they get more money from a short sale than a foreclosure (much more).

This is why most lenders are willing to pay all the costs associated with the short sale.

Thinking about a short sale?

Click on my Austin Short Sale Link below:

http://AustinShortSale.com

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