If you are struggling with your mortage payments and owe more than your home is worth, a short sale may be your best solution. A short sale occurs when the lender agrees to accept less than the full mortage balance, rather than take the home back in foreclosure.
To find out if you might qualify for a short sale it is best to speak with a short sale expert, like myself. Here are some qualifying factors to consider.
1. If you cannot sell the home without going into “the red”, your situation may qualify for a short sale. Take the sale price of the home and subtract all of the selling expenses like the Realtor’s commission, transfer tax, liens, HOA dues, etc. If the resulting number means you would have to bring money to closing, you may qualify for a short sale.
2. If you do not have enough income to make your mortgage payments, you may qualify for a short sale.Perhaps your financial situation has changed and you are unable to pay all of your bills, including your mortage. You may qualify for a short sale.
3. If you have depleted your savings, you may qualify for a short sale. You see, even if your income has dropped, if you have a lot of money in savings, the lender will expect you to make your mortgage payments. If you can show that your savings are depleted, you may qualify.
4. If you can pass the lender’s hardship test, you may qualify for a short sale. There are certain hardships that the lender will consider to qualify you for a short sale. Among those hardships are:
- Bad health for you or a family member that has caused severe financial hardship.
- Death of a spouse which has resulted in financial hardship.
- Divorce which has caused a reduction of income.
- Being called to active military duty which has reduced your income.
- A job transfer which moves you out of the area and then you cannot sell or rent your home.
- A disabling injury which prohibits you from working.
- You have lost your job and cannot find another.
- You are financially insolvent with liabilities outweighing your assets. You simply do not have the ability to pay your mortgage.
(Copyright © 2007 By Dan Forbes, All Rights Reserved.)
