Can You Get a Short Sale If You're Not in Default?
A 2009 research study by First American CoreLogic in California found that more than eight million Americans owe more on their homes than the homes are actually worth. If you are one of the many individuals who is "upside down" on their mortgages, a short sale may be a viable option.
Other People Are Reading
-
Facts
-
In a short sale, your lender agrees to allow you to sell the home for less than the amount you currently owe. This helps the lender avoid an expensive and paperwork-heavy foreclosure.
Features
-
Each lender has different policies, but most lenders will refuse to negotiate a short sale with you if you are current on your mortgage payments.
-
Considerations
-
You must submit hardship documents with your short sale application. If your hardship documents demonstrate that you will soon be unable to make mortgage payments, your lender can opt to approve your short sale before you fall into default.
Effects
-
If your short sale is approved, you may attempt to sell your home at fair market value. Your lender must approve any offers on the home that you receive before the sale can take place.
Warning
-
If the home is not your primary residence and your lender writes off the unpaid balance of the loan as a tax loss, you will be expected to pay taxes on the amount. After 2012, you must pay taxes on any type of short sale debt.
-
References
Resources
- Photo Credit Sold Home For Sale Sign on Burst image by Andy Dean from Fotolia.com
