Many Californians are underwater with their current mortgages and many who need to sell their home are cash poor to make their lender whole. The only available option outside foreclosure is often a short sale for these homeowners.
Here are five tips when considering a short sale:
- Don’t assume you have to sell your home and move: check about other options. Do you really prefer to keep your home if your payment could be made more affordable instead of selling? If so, you should call your Loan Servicer – the company that sends you your mortgage bill every month. Ask them about any loan modification programs you may qualify for.
- Document your financial hardship. Lenders are much more willing to forgive debt for homeowners who have been hit with an unplanned hardship such as job loss or medical emergency. Get your paperwork together so you can make a case for any debts you are unable to pay back to be forgiven. We have lists of items that lenders will consider as true hardship.
- Be sure you review the terms approved by the lenders on your short sale: and don’t be afraid to say “no” later in the process. In a short sale, you often won’t know the final terms offered to you by your lenders until long after you have listed your property and received an offer. Be aware of this timing issue and be sure to review the final short sale terms approved by your lender or lenders before closing the transaction.
- Ask about relocation support. Some loan servicers have special programs and offer financial support for relocation in the context of a short sale.
- Check with your tax advisor. Even if you don’t have one, check with someone to ensure your don’t have a bad tax surprise caused by debt forgiveness. In some cases it is included as income on your tax return. This is particularly true for anyone who refinanced their loan and pulled cash out in the past, or took out a home equity line of credit.
Find us at www.TheBremnerDistressedGroup.com for more answers and assistance.
The Bremner Group at Coldwell Banker
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