Short Sale
Financial term in the Real Estate category
Definition
Selling a home for less than the mortgage balance with lender approval. Alternative to foreclosure but still negatively impacts credit score. Lender may forgive the difference.
Related Terms
Foreclosure
A legal process where a lender takes ownership of a property when the borrower fails to make mortgage payments. Can severely damage credit and result in losing the home.
Mortgage
A loan used to purchase real estate where the property serves as collateral. The borrower makes regular payments over a set term (typically 15-30 years) until the loan is paid off.
Credit Score
A numerical representation (typically 300-850) of your creditworthiness based on your credit history. Higher scores indicate lower credit risk and can lead to better loan terms.
Frequently Asked Questions
What is Short Sale?
Selling a home for less than the mortgage balance with lender approval. Alternative to foreclosure but still negatively impacts credit score. Lender may forgive the difference.
Why is Short Sale important in personal finance?
Short Sale is an important real estate concept that helps individuals make better financial decisions. Understanding Short Sale can improve your financial planning and help you achieve your money goals.
How does Short Sale relate to Foreclosure?
Short Sale and Foreclosure are related financial concepts. A legal process where a lender takes ownership of a property when the borrower fails to make mortgage payments. Can severely damage credit and result in losing the home.
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