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WHAT IS A SHORT SALE?
A short sale occurs when a lender accepts less than the full balance of the mortgage balance at closing. Short sales are often a solution for homeowners who need to sell but have a higher mortgage balance than their homes are currently worth. In the past, short sale approvals from a lender were very rare. Thankfully, changes to corporate and government policies have significantly improved the chances of having short sales approved for families across America.
A short sale allows the homeowner the ability to avoid foreclosure and salvage some of their credit score. In addition, the homeowner has the ability to qualify for another mortgage within two years as opposed to five years or more with a foreclosure. Today, lenders are approving short sales for reasons beyond a mortgage balance higher than the current market value of the home.
WHO QUALIFIES?
Any family facing a financial hardship recognized by their lender can qualify for a short sale. A hardship can be simply defined as a material change in the financial stability of the homeowner between the time of purchase and time of the short sale negotiation. Our clients have been approved through their lenders for the following hardships:
• Decrease in the value of the home
• Unemployment
• Loss of primary income source
• Inability to work due to health crisis
• Mounting medical expenses
• Employment relocation
• Failure of business
• Bankruptcy
• Death of spouse or significant other
• Divorce or legal separation
• Inability to sell or rent the home
• Garnished Wages
• Extensive and expensive repairs needed
• Military service
• Incarceration
Several banks have allowed short sales without meeting the above criteria, if you have questions about your specific situation, please contact us for a confidential consultation.
SHORT SALE VS FORECLOSURE
Most of our clients have made the decision to choose a short sale over a foreclosure to avoid the lasting effects foreclosure may have on their families. Unlike a foreclosure, when a lender approves a short sale the diffrence between the agreed upon settlement and the mortgage balance is discharged and no longer the responsibility of the homeowner. Many families who have been forced to forclose have been left with that large responsibility, often over $100,000. Foreclosures also have a harsh effect on credit scores, making it hard to qualify for another mortgage for atleast 5 years. The average family who short sales can begin the home buying process within 2 years. One of the biggest diffrences is that when a homeowner is foreclosed on, they recieve no relocation assistance. As of February 1, 2015, The Home Affordable Foreclosure Alternatives's Short Sale Program allows qualified homeowners to recieve up to $10,000 for moving expenses once the short sale process is complete.
