Are you upside down on your home? Have you lost your job? Going through a divorce or bankrupcty? Some times good people go through rough times. I can help you try and sell your home and potentially reduce the damage to your credit history. Thousands of people around country are taking advantage of short sale programs offered by banks. I can help you, just give me a call and arrange your confidential meeting. Call Steve at 402-689-7550 or fill out the form below.
Navigating Short Sales: What to Do When the Sale Price Leaves You Short
If you're thinking of selling your home, and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won't cover your total mortgage obligation and closing costs, and you don't have other sources of money to cover the deficiency. A short sale is different from a foreclosure, which is when your lender takes title of your home through a lengthy legal process and then sells it. 1. Consider loan modification first. If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as: · Refinancing your loan at a lower interest rate · Providing a different payment plan to help you get caught up · Providing a forbearance period if your situation is temporary When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if · Your property is worth less than the total mortgage you owe on it. · You have a financial hardship, such as a job loss or major medical bills. · You have contacted your lender and it is willing to entertain a short sale. A word of caution. Even if you are in the process of a loan modification, please be sure the bank is not moving forward with foreclosure. Don't make this mistake, "But we were in the middle of a loan modification". Some home owners, find out the bank foreclosed when the bank comes to winterize and secure the home. 2. Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include · A hardship letter detailing your financial situation and why you need the short sale · A copy of the purchase contract and listing agreement · Proof of your income and assets · Copies of your federal income tax returns for the past two years 3. Don't expect a short sale to solve your financial problems. Even if your lender does approve the short sale, it may not be the end of all your financial woes. Here are some things to keep in mind: · You may be asked by your lender to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale. If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options. · Any amount of your mortgage that is forgiven by your lender is typically considered income, and you may have to pay taxes on that amount. Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Be sure to consult your real estate attorney and your accountant to see whether you qualify. · Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy. Note: This article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA. Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2008. All rights reserved. |