If you’re having trouble making mortgage payments on your New Jersey home, your lender may allow you to pursue a short sale. Although it may have negative consequences to your credit score and history, a short sale is generally preferable to foreclosure. Let’s take a closer look at some situations in which it might make sense to sell your property for less than the outstanding balance on your home loan.
You just lost your job
Without a steady income, it may be difficult to make ends meet even if you don’t make your mortgage payment on time. If you have health issues, losing your job will likely mean that the cost of receiving medical care will likely increase. Therefore, it may be a good idea to ask your lender if there is a chance that you could walk away from the property.
Have you already fallen behind on your payments?
As a general rule, lenders won’t consider a short sale unless you have already missed at least one payment. However, if you can show that a current hardship will likely lead to missed payments in the future, your mortgage servicer may allow you to put the home on the market before this happens.
What’s the state of the housing market in your area?
If home prices in your neighborhood have fallen significantly since you moved into your house, you could find yourself hopelessly upside down on your mortgage. Your lender knows that you don’t have much incentive to continue making payments on a piece of real estate that is essentially worthless. Therefore, you will likely be given permission to sell it so that the bank can recoup some of its money.