If you are behind on mortgage payments for your home in Tennessee but would like to avoid having your home foreclosed on, you do have some options. One such option is a short sale. You may have heard the term before but are unsure what it means.
If you owe more on your mortgage than your home is worth on the market, your lender may agree to accept an amount lower than your outstanding balance and forgive the rest of the loan. According to Bankrate, the advantage for the lender is that it saves them the time and expense of having to initiate foreclosure proceedings. The advantage for you is that you are able to sell your home and get out from the mortgage payments you can no longer afford.
A major disadvantage is that it requires you to move out of your home and find someplace new to live. That can be hard for many people, especially if you have been in your home for a long time or if you have put a lot of sweat equity into fixing your home up just the way you wanted it. In addition, your credit score may be impacted.
In order see if you qualify for a short sale, your lender will likely look at two factors. The first is if you have filed for bankruptcy. If you have, a short sale is not likely to go forward as the automatic stay provision in bankruptcy prevents lenders from negotiating a short sale. The second factor is that you must be delinquent on your mortgage payments. If finances are tight but you have been eking out your monthly payment, your lender may not consider you for a short sale. However, once you are more than a few months behind and have been put on notice that you are in default, the lender may be willing to accept a short sale. This is general information on this topic only and is not intended to be legal advice.