Who Can Qualify for a Short Sale?

A short sale can help homeowners get out of mortgages they can no longer afford, but this option is not available to everyone. If you are considering the possibility of exiting from your mortgage, it makes sense to explore the qualifications thoroughly. Here are some of the circumstances that could make it advantageous and likely for you to get a short sale.

1. You are underwater in your mortgage. In other words, you owe more on the home than the home is actually worth. If at any time you needed to sell, you would have to give the mortgage lender more money above what the buyer is paying for your home. Owing more on your home than it is worth usually happens when the market value of your home drops over time.

2. Your mortgage is in default, or default is imminent. Perhaps you have gotten behind in your mortgage payments already, are in default, and do not want to be a victim of foreclosure. Maybe, on the other hand, you are feeling the pinch so much that it is obvious that you will soon be in default based on what you know about your financial situation. A short sale cuts off the foreclosure process and makes it possible for you to leave the payments behind. You will also have to leave the home, but in most cases you will owe nothing at the end of the deal.

3. You have encountered financial hardship. There are many life events that could lead to financial hardship. You could lose a breadwinner in several ways. For example, your spouse could die or you could become divorced or separated. All these circumstances might make it difficult, if not impossible to pay your mortgage payments.

Jobs can cause situations that affect your ability to pay as well. Your hours or pay could be cut. You could be forced to transfer to another location. You could be demoted. You could be laid off or lose your job altogether. Short sales provide the perfect solution for many people who can no longer keep their homes due to job problems.

Family medical emergencies can also place an excessive burden on the family budget. There are not only payments to doctors, hospitals and specialists. There might also be payments for medical equipment, home modifications such as ramps, or medications. All these expenses can make it nearly impossible to pay the mortgage payments as owed.

The most important thing to remember about qualifying for short sales is there is usually a deficiency of some type there. Your home might be short on value, you might be short on resources, or you might be short on time to act before foreclosure. The best way to be sure you qualify is to talk to a short sales expert and get a professional opinion.