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How bad was your credit affected, and is there anything I need to know before we proceed with paperwork?
Background: live in FL, lost my job (was making $50k), our income has been cut in half obviously. Working in Real Estate Development down here in FL and got a possible job offer out of state. We cant rent it out because it would rent for $1200/mo. and our mortgage and all other expenses would be close to $2000/mo.
I have read that your credit score may be reduced by an average of 300 points. I think the big variable is that many who are in this situation also have substantial unsecured debt, too.
Is 300 that for the short sale itself MAM, or does it encompass the missed payments and all also?
I really don't know, Brandon. I think those who embrace a short sale, may be more likely to be delinquent, on other debt, too. It also matters how many loans are outstanding on the property.
If you need a good agent in your area, pm me. You have experienced a genuine hardship. Depending on the bank of course, due to your location, that it's your primary residence and hardship you have a very good chance of having a successful short sale. Especially now. Who's the bank?
Hi Palmcoasting. We have been in contact with a realtor who can help us and we meet them soon to discuss. Thanks for the offer though, I appreciate it. The bank is Citi Mortgage. We have tried for 6 months to get a modification, that way, when I take the job offer in NC, we can leave and keep the house and rent it out. Right now, we'd be about $800 in the hole every month due to the difference in our mortgage and what we could rent it for. We cant afford to do that. So with my job offer in another state, not being able to find work here, and our house depreciating by about $200k, we thought short sale is best option.
It might be helping if you offer to take a judgment so the bank can see your willing to do something from your side, which can help to close the short sale sooner and ask in return if they have you do the short sale without consequences for your credit score...
I did a short sale as a buyer and the seller was a real estate lawyer specialized in foreclosures (kind of ironic) and she took a judgment of $ 25K to get out a.s.a.p. and not to delay things or get foreclosed on...that amount together with my offer was a more reasonable price and the bank took it. so a win win situation.
Unfortunatly not many people want to deal with a judgment and rather walk away while not realizing that their credit score can be damaged so much that they end up paying so much more for other things, that a judgment can be better for them...+ tey will be able to get back on their feet faster that way.
How bad was your credit affected, and is there anything I need to know before we proceed with paperwork?
Background: live in FL, lost my job (was making $50k), our income has been cut in half obviously. Working in Real Estate Development down here in FL and got a possible job offer out of state. We cant rent it out because it would rent for $1200/mo. and our mortgage and all other expenses would be close to $2000/mo.
Definitely other things to know.
For example
1. Is your debt original debt that you took out to buy the house, or did you refi later? If you did a refi, did you take cash out? If you took cash out, what did you spend it on?
If you used it to live on, or pay for kids college, or anything not directly related to the property itself, that debt can be taxed if written off. In other words, if the bank approves a short sale, and forgives the debt above and beyond the sale amount, the IRS can come back and say that you have to pay income taxes on the amount written off.
2. Do you have PMI (private mortgage insurance) on the property (eg. did you put less than 20% down on the house when you bought/refi'd it? if so, you very possibly pay PMI). If you do, the PMI company also has to approve the short sale, in addition to your bank. It is becoming more common for them to reject sales, so you may not be able to sell for what both the lender and PMI company will agree to.
These are just the first two examples that come to mind. You need an agent who is both intelligent, experienced at Real Estate, AND experienced at short sales in order to have the best chance to sell successfully.
1. Is your debt original debt that you took out to buy the house, or did you refi later? If you did a refi, did you take cash out? If you took cash out, what did you spend it on?
If you used it to live on, or pay for kids college, or anything not directly related to the property itself, that debt can be taxed if written off. In other words, if the bank approves a short sale, and forgives the debt above and beyond the sale amount, the IRS can come back and say that you have to pay income taxes on the amount written off.
2. Do you have PMI (private mortgage insurance) on the property (eg. did you put less than 20% down on the house when you bought/refi'd it? if so, you very possibly pay PMI). If you do, the PMI company also has to approve the short sale, in addition to your bank. It is becoming more common for them to reject sales, so you may not be able to sell for what both the lender and PMI company will agree to.
These are just the first two examples that come to mind. You need an agent who is both intelligent, experienced at Real Estate, AND experienced at short sales in order to have the best chance to sell successfully.
Hi, we have a great realtor certified in short sales. And the answer to both questions is No.
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