New Haven Connecticut Short Sales-Do You Qualify?
If you own a home in the New Haven Connecticut area, are in arrears on your mortgage payments or have found out that you owe more money to your lender than what a buyer is willing to pay for your home does not automatically mean you will be able to just sell your home for less than what is owed to your lender. It is going to be dependent on many factors.
The simplest way to get a short sale approved is to pass the hardship test. The more worse off your situation is financially, medically, etc. the less complicated it can be to get your New Haven Short Sale approved. To qualify as a New Haven short sale, you must pass the Hardship Test and show just and provable reasons why you cannot keep your home any longer.
The Hardship Test– As you go through each of these questions take a look at your current situation to see if it will pass the hardship test.
- Did you lose your job since you bought the home?
- Have you incurred new large medical bills since you bought the home?
- Did your interest rates increase so much that it is now a hardship for you to pay your mortgage?
- Are you recently divorced or have to pay high child support payments?
- Have you had an illness, injury or bad accident and could not work?
- Have you been relocated to another city or state?
Naturally each situation is different. Each short sale request is looked at individually. Bottom line is you must be able to prove there is a hardship.
What is NOT a Hardship? If you took all of the equity out of your home and used your home as an ATM machine and are now in debt you are going to have a very tough time having that accepted as a hardship. Unless you plan to take part in the loss to some extent we would propose that you do what you have to do to be able to keep your home.
If you bought your home at the height of the market and it is now worth less than what you paid for it that is not a hardship or reason to sell your New Haven home as a short sale. However just the bare fact that you may be upside down in your mortgage is a circumstance that your lender may be wiling to take under consideration as long as you are agreeable and willing to contribute a promissory note or a one lump payment. It all comes down to this being a business decision.
The Asset Test –Are there assets that you can liquidate to bring to closing when you sell your home short of what is owed to your lender?
- Do you have money in CD’s and savings accounts?
- Do you have stocks and bonds?
- Do you have equity in other properties?
Your lender is not going to take all of the loss if you have any of these types of assets and not have you bring some money to the table at closing. Your lender will only accept the short sale if you contribute to the loss as well. You may however be able to negotiate the loss with your lender.
The Fraud Test– Did you commit fraud on your loan application for this property? If you were not truthful and lied about anything on your loan applications like:
- Where you worked?
- What your assets were?
- How much money you were making?
Lenders have access to your original loan application and any untruths or lies are going to be checked out by the lender. They will be matching up what you are saying now to what was said on your original application when you applied for the loan. If there are any big differences then you better have a very good explanation of why the change. An obvious reason would be a job loss.
If you’re finding it hard to pay your mortgage, facing financial difficulty and owe more on your home that what it’s worth please give us a call to discuss your options. Even if you’re facing the possibility of foreclosure it is not too late to try and sell your home as a short sale. A short sale is an emotional transaction and we can help you take the stress out of losing your home to foreclosure. Call us today for a confidential consultation.
Disclaimer: This post is not intended to be or to provide legal advice. We recommend that you speak to your attorney and your tax accountant regarding specifics and to find out if this is the best option for you in your situation.