If you are struggling to make your mortgage payments and facing the possibility of foreclosure, you’re not alone and you are not out of options. One path worth considering is a short sale, which can help you avoid the long-term impact of a foreclosure on your credit report.
As a mortgage originator, I have helped many homeowners navigate this process.
A short sale occurs when your lender agrees to accept less than the full amount owed on your mortgage to settle the debt. In this scenario, you sell your home for less than the remaining balance on your loan, and the bank forgives the difference or negotiates terms for repayment.
Not all lenders will agree to a short sale, but many do if they believe it’s a better alternative to foreclosure. It requires careful negotiation and solid documentation, but it can be done with the right guidance.
The first and most important step is open communication. Contact your lender and explain your financial hardship. Whether it’s due to job loss, medical issues, divorce, or another major life change, your lender will need a clear understanding of why you’re unable to make your mortgage payments.
They may request documentation such as:
- Recent pay stubs or proof of unemployment
- Bank statements
- Tax returns
- A hardship letter explaining your situation
Once your hardship is established, your lender will need a detailed look at your financial situation. This may include:
- Your monthly income and expenses
- Outstanding debts
- Assets like savings, investments, or additional property
They want to be sure you’re genuinely unable to continue paying before considering a short sale.
Once your lender gives you preliminary approval to pursue a short sale, you’ll need to work with a knowledgeable real estate agent. They will help you:
- Prepare a comparative market analysis
- Submit a preliminary net sheet to the lender
- List the property and negotiate with potential buyers
After you receive an offer, the lender will review the full package, including the offer price and the listing agreement, before giving final approval.
A short sale may not be ideal, but it’s often a less damaging alternative to foreclosure. It can help you:
- Avoid a foreclosure judgment
- Begin repairing your credit sooner
- Possibly qualify for a future mortgage more quickly
Struggling with your mortgage and unsure what to do next? Let’s talk about whether a short sale is the right move for your situation. I can guide you through the process step-by-step.
Reach out today and let’s find the right solution together.