The housing market continues to decline, and more people are finding themselves under water. In Phoenix, Arizona, people are selling their homes because they can no longer afford the mortgage. While foreclosure is an option, short sales are fast becoming the more frequently chosen route. Why? This article will explain the benefits so that anyone who finds themselves in this position can make an intelligent decision.

Due to the declining housing market, many homes are now worth less money than they were when the owner bought the home. If a homeowner gets behind on their monthly payments, they are unable to refinance since the home is worth less. Many feel at this point that foreclosure is the only option, but Phoenix realtors have noticed an increase in short sales. This is advantageous for the seller in several ways.

One advantage is your credit rating. While a short sale does have a negative impact on your rating, it is less severe than foreclosure. When you go into foreclosure, your credit rating drops by 250-280 points, and you usually cannot purchase another home for at least 36 months, usually 4 years or longer. When you choose to go the short sale route, your credit score is reduced, but it is usually around 80-150 points and you may qualify for another mortgage in only 18-24 months.

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Foreclosure process is not only an emotional process, but is also scary, and this is because certain terms used in this process is confusing and the paperwork adds to more confusion. The best way of handling foreclosure process is by getting educated and also by keeping the communication lines open. Conversely, you can consider 3 things to understand regarding the foreclosure process as vital.

Firstly, gather information with your bank about starting foreclosure process and find the best way out by calling them and speaking to them about their policies. However, starting the process totally depends on the bank, while some foreclosure proceedings start after 90 days. The process of foreclosure may take longer time as well. Talking to the bankers about the process to start is necessary. This also is based on your willingness to a great extent. Banks and their style of working differ such that some banks delay to a great period, while others figure out solutions within a specific period.

Secondly, knowing the time taken for foreclosure process is ideal so that it helps in having clarity. As it varies from one bank to another, the ideal way of finding out information is by asking your bank and talking regarding this to the foreclosure department. It depends entirely on the working process of the bank and its decision to move proceedings. Hence, some banks are done within six months and others consume a great time.

Thirdly, comprehending other alternatives for foreclosure is essential as there are ways to avert foreclosure. Of course, these alternatives completely depend on situations that may or not change such as financial situations that are permanent or temporary, and also on the desire to stay or not in the house and the amount you owe on the house. There are many factors involved in this process. Talking to the bank as well as a foreclosure attorney helps in figuring out options and also in finding the best solution.

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