Understanding The Short Sale Process
Is a short sale right for you?
by: Kortney Glassford, Real Estate Consultant
Many home owners can qualify for this option of selling their underwater home and not damaging their credit for more than two years.
Mortgage Lenders are becoming slightly more accommodating for home owners who are in need of loan modifications but the truth is many people who haven’t tried can still qualifying to short sale their home which, in the long run, can save tons of money. Most home owners don’t know their options and are scared to seek the information because they might discover the worst option: having no options.
Take a few moments to read through the simple steps in finding out if you may qualify for a short sale.
Tops Ways of Qualifying for a Short Sale: Qualify for Hardship
• Loss of employment – or lowered income
• Illness resulting in debt and loss of employment
• A death in the family leaving income deficiency
These are the top ways to qualify but are not the only, if you have a different situation still seek advice from professionals.
While you may feel these items may not pertain to you consider this: were you making the same income now as you were when you purchased the home? If yes, you may not qualify. If the answer is no and you are making even just a few thousand dollars less a year that could be enough to qualify for a short sale.
But Will My Credit be ruined?
A short sale will damage your credit about 200 – 300 points. If this remains the only large negative item on your credit that score can be repaired though on-time payments and low credit card balances in as little as 24 months.
How can I find out if I qualify for a short sale?
You can contact your lender directly and attempt to negotiate the short sale yourself; this process is labor intensive and typically takes 90 – 120 days. Take advice from professionals and let them handle the short sale. Contact a real estate attorney, real estate agent or lender in the mitigation department.
What will the outcome be?
The outcome will be that you’ve sold a home you’re most likely upside down on and you’ll need to either live with family or rent a home while your credit is being repaired for around two years. Even if you are paying a similar amount each month in rent once you are able to purchase a home again you’ll be able to get into a home which is similar or most likely nicer than the home you’d short sold.
Don’t Spend 10 -15 years trying to get your home’s value equal to what you owe on it. Stop treating your home like a moral obligation and start thinking about it like an investment.
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