A couple of homeowners whose financial circumstances have changed drastically (one lost her job, the other is self-employed and lost contracts due to market conditions), have asked me in regards to short selling their home:
1. Do I NOT pay the mortgage first?
2. Do I KEEP paying the mortgage.
"WHICH OF THESE GIVES ME A BETTER CHANCE OF A SHORT SALE APPROVAL?"
Both of them have only between 2 and possibly 4 months of savings left to keep going.
Both of them hope that their incomes will come back up (find a good paying job & get other contracts lined up) so that they can afford to keep the house.
CAN THEY AFFORD TO HOPE AND WAIT?
Rather than agonize, my recommendation is not to wait and to get financial and legal advice IMMEDIATELY.
I feel so bad for them. They have worked so hard to purchase their dream home that they thought they could live in until the end of their lives.
If they lose their home, whether by short sale or foreclosure, what looms ahead for them?
Whichever they decide, struggle through somehow or short sale, I will be there as either their real estate professional to get them through or just as their friend.
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