- Posted by Jordan Blakley
- short sale
Have you fallen behind on your mortgage, or tried re-negotiating your terms to no avail? If you answered yes, you may be a perfect candidate for a short sale – a process in which a homeowner sells a home for less than they owe.
Should You Consider a Short Sale?
A short sale allows homeowners to avoid drawn-out legal processes and regain control of their finances faster than typical foreclosure proceedings.
If you continue to maintain good credit after your short sale, you may be eligible for a new home loan in as little as a few years. The short sale will closely resemble a regular sale, potentially allowing you to avoid the negative perception of a foreclosure. You will work closely with all involved professionals, decreasing the likelihood of scams.
Do You Qualify for a Short Sale?
When requesting a short sale, lenders typically suggest homeowners meet three simple requirements, including:
1. A Financial Hardship
A financial hardship is an unexpected circumstance that will hinder your ability to make those mortgage payments on time. Some examples of financial hardships include: the loss of a job or income; relocation; illness; divorce; or death.
Insolvency means you are unable to meet your financial obligations as they become due. However, you do not need to be completely out of cash to be considered insolvent. For example, having some cash in the bank for day-to-day living expenses will not disqualify you from obtaining a short sale.
3. A Monthly Deficiency
To determine if you are currently suffering from monthly financial deficiencies, simply add up your monthly expenses and compare it to your monthly income. If you can't pay your bills, or if it's clear that you will have difficulty doing so in the near future, then you have likely met the eligibility.
Is a Short Sale My Only Option?
With so many Americans navigating through the rough housing market, there are more solutions and sources of help than ever before. In fact, depending on your current lender and other eligibility factors, you may be able to participate in several programs to refinance, modify your loan to lower your payments, or even receive a principal reduction.
Therefore, we suggest contacting your mortgage counselor or lender and researching all alternatives before committing to a short sale.
How Do I Get Started?
While the short sale process is generally less complicated than a foreclosure proceeding, it can still be a little confusing. Therefore, it's important that you contact your mortgage lender and real estate agent for help. These professionals will guide you through the short sale process and will ensure that all parties involved get the best deal possible.