What Are the Requirements For A Birmingham Short Sale?
Are you on the brink of bankruptcy? Were you recently laid off from your job, your only source for an income, and now you’re left with a huge home loan that you still need to pay? Did your property lose value to the point that you no longer find it reasonable to continue paying for the remaining mortgage? If you’re in a situation like this, you will be happy to hear that your problems can be solved if you ask for a Birmingham short sale advantage from your lender. Unfortunately the short sale cannot be granted to just about anyone since a short sale has certain qualifications. If the term ‘short sale’ sounds foreign to you, and you’re wondering what are the requirements for a short sale, stay in your seats because you will learn all about that once you continue reading.
So What Exactly Is A Birmingham Short Sale?
Many individuals have heard of the term ‘short sale’, but they don’t really know the full meaning of this term and how it exactly works in real estate. A short sale is basically an arrangement made by the current homeowner and the lender. Usually in short sales the current homeowner is nearing Alabama foreclosure of their property. The homeowner then makes an arrangement with their bank or lender to sell the property for less than what the owner owes for it. In a Birmingham short sale, the seller does not make any profit for selling their home, but they do get to avoid the many problems that one could face from a property foreclosure.
If a short sale is successful, the current homeowner will be free from any remaining loans that they have on their home and thus freeing the Birmingham homeowner from any contractual obligations.
What Are the Advantages of An Alabama Short Sale? How Does It Compare To Loan Modification and Alabama Foreclosure?
A short sale is a sort of a win-win situation, for the seller, lender and the buyer. Although technically the seller will be ‘shorted’ because the buyer will pay for the home for a fraction of what the homeowner originally paid for it. But then again, in return for the small payment for the home, the seller is able to avoid the damage that a Birmingham foreclosure can cause to their credit score.
Home buyers taking advantage of the short sale privilege get great benefits as well. With the Alabama short sale, the home buyer will be able to get a big discount on their new home. Compared to a foreclosure, the home buyer will find the short sale to be an easier transaction to make because with the short sale, the homebuyer no longer has to worry about removing the current homeowner from the property.
Loan modifications can be pretty tricky and risky. When doing loan modifications, the lender will require you to make three payments. These payments are necessary in order to guarantee the lender of your “good faith”. A word of warning though: in some cases, even though you have completed the three payments, the lender can still deny you your request for a loan modification. If you’re planning on selling your home with use of the short sale privilege, it is important to know that the short sale transactions are not something that you can do on your own. Not only do most States in the US legally require the presence of a licensed real estate broker, an experienced broker can help you set up a price that the lender or bank will actually accept. Are you unsure on where you can find a broker that you can rely on? You can always ask assistance from a real estate company to help you look for an experienced broker. Short Sale Specialist Network is one example of a real estate company that can happily assist you with your needs.
What Are the Qualifications For A Short Sale?
With all the advantages and benefits that you can gain from a short sale, you’re probably thinking of taking this path instead. Before you start seriously considering this option though, you must first be aware of the necessary qualifications you need to meet to be granted the short sale privilege. Yes, that’s right. Not everyone can short sale a property. There are certain qualifications that one has to meet in order for the bank to approve that the property can pass as an Alabama short sale. Remember, the short sale is a privilege, and not a right. In order for the bank to accept the short sale, they will also weight if they will benefit more from the short sale instead of the property foreclosure. The seller must also meet the requirements for the short sale application to be approved. We have listed the requirements or qualifications for a short sale below.
1. Your home loan must be larger than what your home is presently worth. This means that your home’s market value has dropped to the point that the unpaid balance is now larger than the current price of the property.
2. You must have no assets available. The bank or the lender will require a copy of your financial statements or your tax returns. Your lender must not see that you have any assets, because then they will start to consider that you still have the ability to pay your remaining loans. If you have remaining assets but you still want to file for a Birmingham short sale, your application will still be considered. Be reminded there are some lenders who will grant you a short sale but they will still require you to pay the remaining loan, although in these cases, the amount of the loan will be decreased.
3. A financial hardship or difficulty must be present. The financial hardship must be an issue that can be verified. The reason why you miss your monthly loan payments must be rooted down to your financial hardship. There are many types of issues and situations that can be classified as a financial hardship.
• Loss of investment or investments
• Large medical bills caused by a major illness
• High interest rate loans
• Change of loan terms
• Increase in bills paid monthly
If you aren’t suffering from any financial hardships but you still want to file for a short sale, you can still do so given that you have a sound and logical explanation to why you are not capable of paying your mortgage. The good thing about this type of qualification is that the term ‘financial hardships’ is used loosely, and many banks and lenders have their own definition for this term. Most banks even have lenient rules on this matter.
Short Sale Specialist Network is a Professional Network of Real Estate agents accross the United States.
Helping Birmingham home owners avoid foreclosure with a short sale.
Short Sale Specialist Network specializes in short sales in Birmingham. We are your Birmingham Short Sale Specialist Realtor and Birmingham loan modification and distressed property expert. This article and content is for general informational purposes and may not be accurate. This should not be taken as legal advice, technical or tax advise under any circumstance. Seek legal advise and representation in all legal matters.