Borrowers may apply for Midland mortgage short sale. This is reliable option if the property has less value than the mortgage.
Buying home is not easy when you do not have enough cash. This is where mortgage becomes the right option. However, this loan takes long term to pay off and something might happen in the future. If borrowers cannot fulfill the amount of loan because the house price is lower, the right solution is short sale. To know more about Midland mortgage short sale, read the following sections.
Understanding Short Sale in Mortgage
Mortgage has many complex words, such as short sale, term, rate, foreclosure, refinance, etc. Each has particular meaning for specific purpose. Short sale is common thing to do when borrowers are in financial difficulty.
1. Mortgage short sale
First thing to explore about Midland mortgage short sale is the borrower knows what short sale means. It is the type of selling property to complete the payment and release the debt. However, short sale has criteria that related to the way this term is applied. Short means you have less money and cannot fulfill the entire loan. Therefore, short sale happens as solution to sell the property because you owe more money than the property value.
Why does this situation happen? There are several reasons why short sale is the last option. Most homeowners are lack of financial understanding. They buy house without risk assessment. When applying mortgage, Midland will assist to check the affordability to explain why borrowers buy that house. However, it is quite difficult to ensure the value of property based on current market level.
2. Pros and cons
Short sale looks like the bad choice, but still has good side. In fact, you should review pros and cons before deciding to rely on Midland mortgage short sale. From the benefit perspective, holding house with value less than the mortgage is bad idea. Homeowner should sell it immediately or renegotiate to sell. Lender and borrower can work together to handle this situation.
You can sell the house and pay the rest of mortgage. The money is short, and you still owe. However, both parties can renegotiate to release the debt, and settle all loan in one process. As the result, you might have the house anymore, but your reputation and credit score do not decrease. As the result, borrower has opportunity to apply mortgage again with better financial assessment. Keep in mind that short sale does not mean borrowers fall behind the payment. They may have financial stability, but the debt is not worth to continue.
In general, one critical issue regarding short sale is time. The house with low value in the future is rare, unless abnormal condition. In that case, many mortgages will be in bad situation. Selling property is not simple thing to do. Midland has specific division to handle this issue.
3. Foreclosure and short sale
When discussing about Midland mortgage short sale, you may have another thing in mind called foreclosure. Both are not simple things to explain, but still necessary to understand. Short sale has been explained in previous section. It is just method to sell the house in order to settle the debt.
On the other side, foreclosure seems to be the last choice if borrowers do not want to involve in mortgage anymore. Both have similar purposes, but with different condition and settlement process. If you apply foreclosure, the mortgage is in default. You cannot afford to pay regularly anymore. Any financial assist is not applicable.
Midland mortgage foreclosure is process to take the loan from borrowers by any means. Mostly, lender will take over the ownership and sell the house in auction. This is the quickest way and simple thing to do. Borrowers cannot afford mortgage anymore and the rest of option is only foreclosure. In this case, credit score will decrease significantly.
More Details of Midland Mortgage Short Sale
You now understand about short sale and why you should choose this option. Other things related to short sale cannot be ignored. People often find difficulty to distinguish between foreclosure and short sale.
As it mentioned above, short sale does not mean the Midland mortgage is in default. In fact, borrowers are still capable to pay until the end of term. Unfortunately, it is not worth anymore because the house has low value. This situation is reviewed from financial perspective, and the decision is short sale. Of course, the main risk is losing the house. As the benefit, you are not in debt anymore or losing the property.
After the short sale is done, lender takes money to cover the debts. Small amount of money might be still available after all debts are paid completely. Borrowers can start again from beginning to apply the mortgage or choose refinancing. At least, short sale does not make lender and borrowers look bad because the selling process uses agency.
In addition, short sale is the solution that both choose to handle recent situation. Midland has other ways to make sure clients can keep the house. If something happens, it is best to call customer service immediately. At the end, Midland mortgage short sale is not bad thing to choose.