Selling your home when you owe too much on your mortgage

Want to sell your house but you owe too much on your mortgage?

I meet dozens of homeowners each month that are either behind on mortgage payments, or will be soon if their financial situation does not get better. The ever increasing taxes on homes are also making it harder for homeowners to keep current with their mortgage payment. These people would love to sell their home (they need too) but they can’t because they owe more then the home is worth. This type of homeowner is the ideal candidate for a short sale and there are hundreds in this area that should consider it.

A short sale is an agreement in which your bank agrees to accept a payoff on the loan for less than what is owed. Short sale provides a way for troubled homeowners to prevent foreclosure and many of the dire penalties involved. An example is a homeowner who has a $500,000 mortgage but the home is only worth about $375,000 in the current real estate market.

There are certain criteria to qualify for a short sale; you cannot do a short sale just because your house is worth less than you paid for it.

You must be in default or close to being in default (missing a mortgage payment). In the past a homeowner would have to be in default by at least 3 months to qualify for a short sale but today some lenders are willing to do a short sale if the homeowner is in distress and close to being unable to afford the next mortgage payment.

You have to show proof by using comparable home sales that your mortgage balance is more than what your home is worth.

The homeowner must prove they are in financial distress and submit a short sale hardship letter explaining why you can no longer make the mortgage payments. Hardship examples include loss of job, health problems, bankruptcy, death and divorce.

You will also have to show that you have little or no assets that you can use to pay off your mortgage.  You will provide bank statements and if you have a job recent pay stubs as well as the past 2 years tax returns. These items will help prove to the bank that you have a financial hardship and may have had one for sometime now. The last thing a bank wants you to do is walk away from the home and let it go to foreclosure. That is also the worst thing you should do as a foreclosure would wreak havoc on your credit as well as a possible law suit or wage garnishment where the bank can force your employer to deduct money from your pay check.

During a short sale the homeowner is allowed to stay in the home until it is sold, it could take 6-12 months from the start to the end of the short sale. The homeowner will not get kicked out of the home like a foreclosure and is able to stay until the home is sold. Just try to maintain your home as best as you can during this time to have a better chance of a successful short sale.

If you feel your financial situation is such that you need to sell your home but you can’t and you want to see if you qualify for a short sale call me at 914-403-4868 or email me at [email protected].

For more info on the short sale process please visit PutnamWestchesterShortSales.com

Staying in your home during a short sale

Staying in your home during a short sale?

I meet a lot of sellers that are in need of my help with a short sale on their home and one of the most common questions I get is whether or not they should stay in the home during the short sale process. Often these sellers cannot afford the mortgage any longer but are able to afford a rental and are considering renting during the short sale term. In realty there really is no reason to leave the house unless the house is in such bad shape that it is not livable.

If you are able to stay in your home during the short sale process then you should. Most sellers during the short sale process who are not able to afford the mortgage are not making any mortgage payments, whatever money they have left over they should save and use it when it is time to move out. The saved up money will be used for moving expenses as well as a deposit on a rental unless living arrangements have been made with friends or family members.

What many sellers do not realize is that a short sale is like any other house sale except the bank has to approve the offer. The owner should maintain the home to the best of their ability and make it look presentable during showings just like any other sale.

Another reason why you should stay in your home during a short sale is because your lender would most likely prefer it. They know that if you are in the home any problems that happened will not go unattended. Loads of problems happen when a house is vacant such as vandalism or if a water pipe bursts and causes tens of thousands of dollars worth of damage to the house, mold issues, mice, rats etc. So if anything you are helping the sale and in essence helping the bank lose less than they already are. The less the house sells for the harder it will be to approve the short sale with the bank.

A vacant house is an attention grabber, if people in the area or even prospective buyers who have seen that house realize the house is empty all the time they may come by “unannounced” to look around or who knows what else. Many of these things can lower the value of the home and as I mentioned above, the lower the offer is for the house the harder it may be to get the short sale approved.

If you must vacate your home whether you are relocating or moving out of state and staying in the home during the short shale process is not possible, no one is going to force you to stay. If you do leave the area and not able to check on the house, if possible have someone check on it once a week. If you can afford to have the lawn cut during the summer then that will also help the whole process and appeal of the home.

How long does the short sale process take? The whole process from the day the house is listed until the short sale is approved and it is time to move out could be 6-9 months or more. If could be even less than that but a conservative timeframe is about 6 months. I just closed on a short sale that took 3.5 moths from the day the offer was submitted. It took less than 2 months to find the buyer so less than 6 months for the whole process.  If you do receive an offer on your home and if your agent and short sale attorney tell you that the process is going well you should then start consider looking at rentals or making other arrangements. Banks are not very flexible with a closing date. Once they approve the short sale they will want to close in 2-4 weeks.

If you need advice on a short sale or want to know if you qualify for a short sale please call me or email me at [email protected].

For more info on the short sale process please visit PutnamWestchesterShortSales.com

If you are a buyer and interesting in buying a short sale or foreclosure home please visit: Westchester Putnam Short Sale Listings

Approved FHA condos in Westchester

Fha financing is becoming more and more common in the current real estate market especially among 1st time home buyers. The low 3.5% down payment is great for these type of buyers. First time buyers are also the majority of the condo buyers in Westchester. Unfortunately trying to find an FHA approved condo complex in Westchester is not easy and there are not too many complexes that are approved. I have compiled a list of FHA approved condos in Westchester below. This list changes often and more may be added in the future or removed.

White Plains – Granada Condos, Minerva Place Condos

Yonkers – Hilllcroft Townhouses, Monterrey Condos, Rivervew Club Condos, The Vista at Hudson Terrace, Westchester Terrace at Crisfield

Hartsdale – High Point of Hartsale, The Classic

Peekskill – Hillcrest Park, Woods III of Westchester

Yorktown – Villas on The Lake

Mohegan Lake – Lakeside Colony

Somers – Heritage Hills Somers NY

West Harrison – Lincoln Hancock Condos

New Rochelle – 60 Remington Place, Glenview Terrace Condos, Knickerbocker Lofts Condos, Prince Street Condos

Port Chester – Homestead Hills

Bronxville – Bronxville Glen

Dobbs Ferry – Village Green

Mamaroneck – Continental View Condos, Parkview Station Condos, Sweetwater Condos

Mount Vernon – Fulton Terrace Condos, Highland Manor Condos, Lorraine Terrace, South 11th Condos

Pleasantville – Foxwood Condominiums

Harrison – The Halstead Plaza

Tarrytown – Carrolwood Condos

To view all condos in Westchester for sale check out: Northern Westchester Condos and Lower Westchester Condos