As I am out and about talking to Homeowners struggling with their mortgage payment I find there is a lot of misinformation about what it takes to qualify for a short sale. While there can be additional requirements based on specific circumstances there are 3 major items that most lenders are looking for to see if a distressed homeowner qualifies.
FINANCIAL HARDSHIP
The definition of a financial hardship is a material change in-between the day the mortgage was signed and today that has affected your ability to pay.
Common Examples
Mortgage Payment Adjustment
Job Loss
Too Much Debt
Business Failure
Divorce
MONTHLY SHORTFALL
In most cases the lender needs to know that you cannot afford your mortgage payment. This is demonstrated on a Financial Worksheet that your Short Sale Realtor will provide. Pretty straight forward.
Shortfall Equation is: Total Monthly Income – Total Monthly Expenses = Monthly Shortfall
INSOLVENCY
This means the mortgage company wants to see that you owe more than you have in cash. It does not mean that you have to be completely broke. Having money in the bank for living expenses is common and will not disqualify you. The lender cannot include retirement funds like 401K’s as liquid assets.
While a short sale may seem like a difficult process the right experienced short sale realtor can make it a relatively simple one. Our team has specialized training and over 8 years experience helping homeowners who may be facing foreclosure. Feel free to contact me by phone or email for a no cost confidential consultation.
