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Homeowner Qualifications for Short Sales

Homeowners need to meet some requirements to get their short sale approvedLending institutions have specific stipulations on borrowers that are able to qualify for a shortsale. Homeowners considering this process must meet certain criteria with their lender before the process can move forward.

The following are some of the common criteria that must be met by homeowners to show they are dealing with financial or economic hardship. Of course, keep in mind, the specifics can vary slightly depending on the specific lender.

  • The market value on the piece of property has dropped significantly.

  • The homeowner experiences a change in their financial situation, which results in bringing home less income than they were initially bringing home when they first took out the mortgage loan.

  • Mortgage payments on the home are a month or more in arrears.

  • Homeowners have no funds within their savings account.

  • A debt service cannot take care of existing liabilities.

  • Payments may still be current on the mortgage, but the homeowner can show the lender proof that they cannot make their payments on the home in the future.

  • The borrower is in an upside down mortgage, which means they owe more on the home than the home is actually worth.

These are only a few of the qualifications that homeowners may have to meet to qualify for a short sale transaction.

When considering this option, homeowners should contact their lender to find out the specific qualifications that the lender requires to be met before granting permission for a shortsale to take place.

Next: Short sale myths