One of the most common questions that families have when it comes to the short sale Minnesota process is what they should do with their mortgage in the meantime. A MN short sale transaction can take anywhere from 3 to 4 months to actually complete. Should you be making your mortgage payments or should you just stop? This is not something that can be answered easily because there is no right answer set in stone. However, it’s important to understand what is at stake if you do completely stop with your mortgage payments during a MN short sale transaction and what this could mean in the long run.
For many short sale sellers the choice whether to continue with the payments is not even a viable one as the debt and the bills are simply too much without even trying to make the payments. Other short sale sellers may have a little extra money that could go towards the mortgage- the question is whether or not it should.
Saving your Money during a Short Sale MN Process
The first reason why stopping payments on your current mortgage could be a good move is because you can put that money towards something else, such as the funds to move elsewhere or pay for a deposit on a rental home. If you have credit card debt or other large debts that are damaging your credit, you could also put the acquired mortgage money towards lowering these debts.
Accepting Defeat during a Minnesota Short Sale
Another reason why many people stop paying the mortgage when negotiating a MN short sale is simply because it is not their house anymore. If they are struggling to make payments and have been warned that foreclosure is in the near future, it may seem fruitless to even try. If the short sale does not go through and you know that foreclosure is the only other alternative, it might be best to save your money to start over again.
Providing Incentive for the Banks to Make a Decision
Finally, those who are in true default and are not paying their mortgage may take the top priority spots in the lending company lineup and thus, the short sale transaction may be sped up. By not paying the mortgage, you are actually speeding up your short sale in MN transaction and providing the lender with an incentive to accept the short sale offer. However, while you are not paying your mortgage, you will be incurring a poor credit rating in the process.
Keep in mind that choosing to continue to make payments during a short sale or stopping these payments is something that every individual must decide on his own and will come down to your personal financial situation and what is best for you. Understanding the pros and cons on each side will allow you to make the right decision. To see a list of the pros to short selling, see the blog titled Continuing Payments When Negotiating a MN Short Sale. And, keep in mind that there are always two sides to every decision in life. The big question is – which is right for you?
