Table of Contents:
- What is a short sale?
- I am in foreclosure. Is a short sale for me?
- What if I have a HUD, VA or FHA?
- Can an investor short sale a rental property?
- Which situation is a short sale best suited for?
- What is financial hardship and why is it so important?
- Will I have to pay capital gains taxes if I sell a property as a short sale?
- I am current on my mortgage, can I still qualify for a Short Sale?
- Do I Qualify for a short sale?
- I have a second mortgage, does this make me ineligible for a short sale?
- My house needs a lot of repair, can I still do a short sale?
- I have other liens on my house, can I still do a short sale?
Learn about short sales and what's involved with the short sale process by reading the following short sale FAQ.
Don't go into the process un-informed, learn the facts from 1st Choice Title Services!
A short sale is the process wherein a homeowner sells their home for less money than the remaining mortgage balance owed to the bank or lender.
The lender must be convinced (via proper documentation) to reduce the mortgage balance to allow the short sale to take place. if approved, the property can be sold for less than the original mortgage amount. This satisfies the mortgage and stops any foreclosure processes.
For a slightly more in depth answer, check out our article explaining what a short sale is and how it can help.
Back To TopYour situation must be evaluated differently as no financial situation is the same. However, the important factors when speaking about short sales, are:
- Property in foreclosure or default
- Personal financial hardship
- Little or no equity in the property
- 60 days until an eviction date
- The homes value has dropped below the amount due on the loan
A short sale can usually be accomplished on all of these types of mortgages, although each mortgage type may have different criteria.
Yes, but remember for investors there may also be some income tax issues resulting from mortgage relief.
generally short sales are processed on properties heading toward foreclosure. This means the homeowner is at least 3 payments behind, and begins the foreclosure process. Recently however, more mortgages that are simply behind or "in default" are being strongly considered as possible short sales while not actually being in foreclosure. A drop in home equity, where the total balance owed to the bank is greater than, the price at which the house can be sold. Lastly, the homeowner must have fallen into some type of short sale qualifying financial hardship which is preventing him from paying the mortgage.
Financial hardship is a crucial to being approved for a short sale. Banks and lenders do not easily give homeowners a break. They require good and valid reason to qualify you for a short sale.
No. Capital gains would indicate that you are in some way financially better off because of money you have made. In a short sale, you lose and owe money.
It is possible some lenders will accept a short sale file for approval on loans that are not delinquent. Other lenders will not accept the file until the loan is delinquent. We can put your Short Sale file together within a couple days and submit it for approval. That is the best way to determine if your lender will accept a file for approval on a loan that is current.
For more information check out our Qualifying for a short sale article, but the basic qualifiers are:
- The Homes Market Value has dropped.
- Your mortgage is near or in default.
- Financial Hardships.
- You have incurred a lack of assets.
No. however both of your lenders will need to be satisfied to complete the short sale. If your first lender will be paid off by the sale, then you just negotiate the terms with the second lender.
Yes, though it can make the process more difficult because the price must be lower to compensate for the repairs. The key is to show the bank's appraiser all the work which needs to be done.
You can, but it gets more complicated and will take longer. Each lien holder must be negotiated with on an individual basis.
