Large Mortgage in CaliforniaWhen you’re a homeowner with difficulties paying for your home loan, you might think of foreclosure as a way to solve the issue. Creditors, however, view this move as worse than a bankruptcy on your credit score. Lenders may then disqualify you from a home loan application for around five to seven years.

Fortunately, there is another way you to address large mortgage debt without the need of foreclosure: short sales. Here are the basics.

What is a short sale?

As defined by Forgive My Debt, a short sale is a sale of property wherein the lender releases the property interest so that the borrower can put the property on the market with a clear title. This entails that the lender accepts less than the owed amount to satisfy the loan and relieves the borrower of the mortgage debt.

A short sale, then, is a long-term solution for homeowners under a large mortgage debt. Keep in mind, however, that this pertains only to California State Legislature; the legislation of some states does not include mortgage debt relief.

What does a short sale cost you?

When you’re already having difficulties paying for your home loan, you want to avoid any more expenses from being added to it. A short sale is usually free for you. With some savvy negotiations, the lender wouldn’t burden you with any closing costs and real estate fees involved in the actual sale.

In terms of time, a short sale requires 90–120 days from the date of the listing. If short sales are not complete by then, it means that the agent in charge of it isn’t doing their job properly.

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In the unfortunate event that you aren’t able to pay for your mortgage debt, get started on the short sale process as soon as possible. It provides you with predictability and a say in the negotiations and the actual sale of the property.