Short Sales Information
Homeowners who are unable to pay their mortgage can try to avoid foreclosure through a short sale. There are certain requirements an individual must meet to qualify for a short sale.
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Definition
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A short sale takes place when a homeowner cannot afford to pay the mortgage and a lender accepts less than the amount owed on the loan.
Qualifications
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To qualify for a short sale certain requirements must be met, such as the amount owed on the loan being more than the value of the home. The lender can also require the borrower to be delinquent with the mortgage payments to start the short sale process.
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Credit Score
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A credit score is affected in a negative way when a home is sold in a short sale. However, a short sale does not prevent an individual from obtaining a home loan in the future.
Documents
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A lender may require a homeowner to show tax returns, bank statements, an outlined monthly budget, paycheck stubs and a letter of hardship when applying for a short sale.
Tip
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It is important to be prepared with all required paperwork in a timely manner and to have a real estate agent guide you through the short sale process.
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