That’s why I think it’s critical to point out to the such homeowner that selling their property may be in their best interests. And if I could make one basic, simple appeal it would be that foreclosure must be avoided at all costs. The reason is that with foreclosure proceedings there also comes a number of catastrophic hassles that normally cause irreparable harm to the homeowner.

For example, if your home is foreclosed your credit rating is going to be devastated for a full decade. Of course, you can also seek protection against the creditors by filing bankruptcy, but bankruptcy has become significantly more difficult to qualify for as laws for filing bankruptcy have become much stricter.

Also, the damage done to a your credit rating due to a bankruptcy would make borrowing money next to impossible. That’s why it is significantly better to sell your property outright on your own terms than it is to suffer the disaster of having your property foreclosed upon.

In real estate, escrow provides a form of mediation between each of the parties involved. This includes the buyers, sellers, lenders, agents, and title company. So in essence, the escrow is simply a holding place for all funds, instructions, and documents necessary for the purchase of the home:

• the buyers funds for the down payment,
• the lender’s funds and documents for the new loan,
• and the sellers deed.

As a buyer, escrow will typically begin when your Realtor delivers the purchase contract and the buyer’s earnest money deposit to the escrow company. The escrow company will then prepare and deliver the initial escrow instructions and other related documentation.

Once your mortgage loan is in place and the new title has been recorded, the escrow agent will prepare and deliver the closing statements to both you and the seller. Be sure to review these statements in detail so you can resolve any inconsistencies before proceeding.

Finally, when the terms of your purchase agreement have been met, the escrow agent will assign the property title to you and distribute the funds to the seller, record the deed, and close the escrow.

Ultimately, the use of escrow is intended to provide security and peace of mind for buyers, sellers, lenders, and real estate agents alike by making sure no funds or property will change hands until all of the terms and conditions have been followed. Keep in mind, the rules and procedures around escrow and closing can vary by region, title company, and lender.

However, short sales are not quite as simple as they sound, and not all houses qualify. For example, once the property falls into foreclosure, it is no longer eligible. Otherwise, here is a simplified list of what must happen before borrowers can qualify for a short sale:

• Borrowers must be at least 31 days delinquent on their mortgage loan.
• Borrowers must owe more than the appraised value of their property.
• Borrowers cannot own assets which can be used to repay the home loan.

Homeowners wanting to apply for a short sale will also be required to submit a short sale packet which includes a variety of financial documents. On top of that, you will most likely be require to write a short sale hardship letter explaining what led to your delinquent loan.

If you are wondering why banks would accept less than what is owed, you bring up an excellent point. Several reasons exist, but the primary reason is because short sales cost less than foreclosure. According to Freddie Mac, foreclosure costs lenders between $60,000 and $80,000 per property.

1) Set A Reasonably Comfortable Temperature – Don’t set the temperature to the lowest extreme or the air conditioner will never cycle off, which will rack up your bill in no time.

2) Have Refrigerant Levels Tested – A refrigeration mechanic or contractor can test your system to determine if you have a refrigerant leak. If your system appears to be either cooling or heating less than normal, it is a good sign that you may have a gas leak.

3) Learn How To Use Your System Properly – If you are not entirely sure how to use your air conditioning system, chances are you might be using it wrong. Talk with an air conditioning contractor or take the time to look over the users manual for some good advice advice on how to best run your system.

4) Clean Filters & Air Ducts -Finally, give your air ducts and filters a quick clean. You’ll be surprised how simple it is to do, and your air conditioner will probably run better because of it.

Choosing The Wrong Mortgage. There are many types of mortgages that you can choose from, including fixed-rate mortgages, adjustable-rate mortgages, interest-only mortgages, and balloon mortgages to name a few. With so many to choose from, it’s easy to make the wrong choice, especially for buyers who aren’t familiar with the advantages and disadvantages of each.

Choosing the wrong home mortgage can be detrimental in some cases. You could find yourself owing the full balance of your home within a few years, or you may find yourself making higher monthly payments when the interest rate goes up. Before you make a final decision about a mortgage, make sure you fully understand the terms, interest rate, and life of the loan. Feel free to ask me as many questions as you need to ensure that you are getting the loan that is best for you and your circumstances.

Borrowing With Too Much Debt. Just because a lender approves you for a home mortgage with your current debt load doesn’t mean you should take it. Lenders analyze your debt in different ways to determine whether or not to extend a loan to you. Borrowing for a home mortgage when you have too much other debt will put a strain on your finances. When you have too much debt you are at a high risk of defaulting on your mortgage, which can lead to foreclosure.

Before taking on a home mortgage, do an analysis of your current financial situation. Consider all the income and debt you have, and also consider your current employment situation. How much will your income increase in the coming years? As a general rule, if your debt is more than 40% of your gross income, you should reconsider purchasing a home until you have decreased the amount of your debt.

Making Too Small A Down Payment. The less you put down on your home mortgage, the more you have to borrow. This ultimately leads to higher monthly payments, and the higher monthly payment may include the cost of Private Mortgage Insurance because your down payment was small.

Fortunately, higher monthly payments can be avoided. Even if you are unable to save up a sizeable down payment, it doesn’t mean you have to be put into a financial bind. It is best to save up as much as you can for a down payment and search for a home that is well within your budget and comfort zone.

When it comes to home mortgages, the key is to not bite off more than you can chew. A mortgage is a considerable undertaking, and it’s imperative that you prepare yourself!