Home Selling in Garden City>Question Details

michpenguin22, Both Buyer and Seller in Garden City, MI

Short sale on current home and Buying a bigger house.

Asked by michpenguin22, Garden City, MI Sat Oct 20, 2012

My husband and I were talking about doing a short sale on our current home because we owe twice as much on it then what its been assessed and wanting to buy another home in the Garden City area because 1100 sq ft is not enough for our family of five. My husband and I dont have perfect credit, mine is better then his. How difficult would it be to do a short sale?

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5
In order to qualify for a short sale you must have a financial hardship. If you are thinking to buy a bigger house does not look to me or to the Financial Institution that holds your mortgage that you are having financial problems. Before thinking to buy find out with an attorney what kind of consequences you could be involved into.

Best of Luck,

Maria Cipollone

Century 21

http://www.Flahomespecialist.com
1 vote Thank Flag Link Sun Oct 21, 2012
Hey there,

I work in right here in the Garden City area. Assessed value often doesn't have much to do with the actual value of the house. In fact, prices are on the rise here in Garden City.

There are a few different things you could do, and I'd like to talk to you more about them.

Please email me at JeffGushman@gmail.com. Let me know the address of your house, bedrooms, basement/etc, and how much you owe, and I will see what houses are going for in that part of town.

Look forward to talking to you!

Jeff Gushman
Century 21 Castelli
JeffGushman@gmail.com
0 votes Thank Flag Link Sun Oct 21, 2012
You sound like the guy who robbed the bank, got caught, said he was "sorry", and so everything should be Okay and we move on.
It doesn't work that way:
You are proving to the Bank that you not only good at paying your bills, but you also do not feel the obligation to fulfill your obligations; why would the Banks give you another chance to do that?

You could probably do a short sale; the Bank would rather lose a little now, rather than more later.
Then you will be without a house, your credit will be ruined, and you will have to wait at least two years to get another loan.

How much your present house WORTH does not matter; it is a roof over your head. Your family has a place to live.
0 votes Thank Flag Link Sun Oct 21, 2012
My morgage is 1200 a month and that with the bank trying to help us last year to "Help Make it Affordable" I failed to mention that my husband lost his job last October because Borders Books and Music went Bankrupt and we are making 1/2 of what we did before. There are bigger homes out there that are less then what we owe on ours and would probably be cheaper morgage wise. And if anyone robbed anyone the BANK is robbing and has been.
Flag Sun Oct 21, 2012
It sounds like you are wanting to short sell just for the reason you feel you made a mistake and bought at the wrong time and now you want to end the game and start over with the refresh button. It just does not work like that and I have to wonder why some just feel this is an option for them. You are looking for the free lunch and it is not there. A short sale is a default in your loan agreement, you are breaking the promise you made to the lender and asking them to lose money and allow you out of the mortgage. Obviously a bank will not be eager to do this. You also need to look into the fact that some states allow the bank to coma after you for the money they lost or they can turn that loss into the IRS and force you to pay tax on it, which could be thousands of dollars to you. There are rules banks require to do a short sale and you have not mentioned any reason they allow a short sale for. No mention of job loss, moving for job reasons, medical bills, inability to make payments and things like this are required, not the fact your house is not worth what you paid for it.
0 votes Thank Flag Link Sun Oct 21, 2012
Tim The housing market crashed right before we bought our home. Houses in my neighborhood are listed between 35k-50k which have which have more square footage , which their back yard dont flood every time it rain(which was not told to us before we bought the house) and would be cheaper then what we are paying now . For you to say we just want a refresh button is wrong when you really dont know the whole situtation, my husband and I are making 1/2 then what we did last year, He used to work for Borders Books and Music at the head quarters right till they closed the doors for ever. The fact is that we need a house we can afford that is bigger and the morgage isnt 1200 a month and that under the making homes affordable program that we filed for last year when my husband lost his job.
Flag Sun Oct 21, 2012
If you aren't struggling to make mortgage payments then you're going to run into some problems in getting the lender to approve your short sale.

Often times, if you're trying to short sale but aren't facing a financial hardship, you'll likely be outright denied.

Some lenders, however, might approve you for a short sale on the contingency that you pay back the difference in a structured 10 or 15 year loan.

In order to be forgiven for any deficiencies (amount owed on mortgage - short sale price) you would have to explain and demonstrate that you are unable to make full payments or soon will be unable to make full payments. The lender requires a "hardship letter" to go along with the 2 most recent year tax returns, 30 days of most recent paystubs, 2 most recent bank statements, and an income and expense sheet. Often times, most people are several months behind on payments and have at least attempted to apply for a loan modification. For those individuals, the deficiency will usually be forgiven (always forgiven under the HAFA program).

If you aren't facing a hardship (reduction in income and adjustable rate increases are legimitate reasons), and are attempting a strategic default, then fannie mae, freddie mac, and fha guidelines would prevent you from obtaining another mortgage for at least 3 or 4 years after completing the short sale.

Those lucky enough to have been approved due to verifiable hardships (reduction of income, interest rate adjustment increasing their monthly payments) AND were current on mortgage payments all the way until the short sale closes are able to IMMEDIATELY qualify for a new FHA mortgage.

FHA has very strict guidelines. If you were to apply for a mortgage immediately after closing the short sale, your explanation would have to be consistent with someone who was in a very bad financial position and not someone who wanted to move on to a bigger home.
0 votes Thank Flag Link Sun Oct 21, 2012
Dan we are struggling , My husband lost his job last October and we are making 1/2 of what we did, He worked for Borders at the head quarters. We have we have gone through the finacial Hardship thing with the back and our payments a month are still $1200 . We have tried refinancing to get our morgage lower and no one will do it cause the house is only worth 40k and we owe 89k.
Flag Sun Oct 21, 2012
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