How To Get Colorado Short Sale Qualification
To be considered eligible to attain Colorado Short Sale Qualification, a homeowner who is facing financial hardship must have proof of a monthly shortage of cash and be in substantial debt. Although no clear determining factors for these exceptions are currently present, it is vital to be aware of the justification behind them. Let’s examine each one individually:
Common Financial Hardships
Since the willingness to fulfill the monthly mortgage obligations is typically in direct relation with finances, it is extremely important for a homeowner contemplating a short sale to be capable of displaying a financial hardship that goes hand-in-hand with maintaining and keeping their current mortgage.
Unemployment is among the top hardships in the world of short sale transactions. This makes it evident the borrower cannot keep up with payments due to financial setbacks and income. The fluctuation with pay in conjunction with pay cuts or moving to a position that does not yield as much money can affect the family on a month by month basis which allows the homeowner to have evidence proving financial hardship.
There are also other circumstances that can determine the borrower’s financial stability and ability to position themselves to repay the mortgage debt. These can include, but are not limited to: a mortgage payment increase over time due to an interest rate that is unadjustable or a re-evaluation by a lender of the current account that results in increased mortgage payments due to increased property taxes or insurance rates.
Colorado Short Sale Qualification Hardships
Splitting with your spouse is also a potential setback that may make you eligible for Colorado Short Sale Qualification along with relocating for a job or an increase in bills, such as medical expenses. Short sales on properties that are occupied by non-owners are also feasible given that the seller can prove a negative rental figure on income tax returns and monthly income sheets.
There are several different acceptable hardships that will position a seller facing a mortgage foreclosure to be eligible for a short sale. Whatever your situation may be, we can help. Contact us today to find out if you qualify.
Monthly Cash-Flow In The Negative
The homeowner will have to fill out a detailed financial worksheet that explains all existing streams of income and all personal and household expenses, in which the mortgage payment will be put into consideration. Expenses should be higher than income in most cases to in order for a short sale to be considered.
A possible exception may be possible for someone who has to move or relocate for their current job or an investor who has a vacant property. Although the monthly income may be more than the overall expenses, the lender may choose to go through with a short sale given there may be a significant reduction of financial assets.
Illiquidity Along With Insolvency
Both these fundamental aspects are sometimes overlooked and not considered by either the homeowner or the real estate agents who are dealing with the short sale. Short sale negotiators who are employed at banks typically are not in favor of homeowners who have large accounts such as savings or other assets that could be liquidated to avoid a short sale. That is why it is vital to understand if you are qualified to go through the initial Colorado Short Sale Qualification process.
In some situations, the lender may not agree to proceed with a short sale if they believe a homeowner can make the payments themselves. In other cases, the negotiator will ask for a promissory note or a set cash contribution during the settlement to continue with a short sale.
During our time as short sale experts we have discovered that it is very important to consult with a short sale attorney or specialist prior to beginning the process in order to find out if any other factors will affect the short sale. It is important to keep good rapport with the lenders as they may look at borrowers differently after the file is submitted for review.
If you have questions about short selling your home and don’t know where to start, contact us today to make sure that you are eligible for a Colorado Short Sale Qualification.